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Canada posts job losses in April

Bite of third pandemic wave shows up in data

The Chronicle Herald JULIE GORDON

OTTAWA — Canada lost more jobs than expected in April as fresh restrictions to contain a variant-driven third wave of COVID-19 weighed on employers, Statistics Canada data showed on Friday.

Some 207,100 jobs were lost in April, more than the average analyst prediction for a loss of 175,000. The unemployment rate climbed to 8.1 per cent, missing analyst expectations of 7.8 per cent. Employment is now 2.6 percentage points below pre-pandemic levels.

"This episode seemed to be a little more impactful in that it led to a big decline in full-time jobs and specifically in private-sector employment," said Doug Porter, chief economist at BMO Capital Markets.

"There were some heavy hits in education and culture and recreation. So it seems like the third wave bit into other sectors a little bit more deeply than the second wave."

Full-time employment was down by 129,400 while part-time employment fell by 77,800 positions.

With many retailers shuttered in April and the restrictions also hitting hotels, food services and entertainment, service sector employment plunged by 195,400 jobs. Employment in the goods sector fell by 11,800.

PROVINCIAL STATS

In Nova Scotia, from April to March, the labour force decreased 0.7 per cent (3,500) to 507,200, according to an analysis by the provincial Finance Department.

Employment decreased 0.2 per cent (900) to 465,900 while unemployment decreased 6.2 per cent (2,700) to 41,200. The unemployment rate decreased 0.5 percentage points to 8.1 per cent.

April 2020 was when peak employment losses were observed. Year over year in Nova Scotia, the labour force increased 13.4 per cent (60,100).

Employment increased 18.9 per cent (73,900), unemployment decreased 25.2 per cent (13,900) and the unemployment rate decreased 4.2 percentage points, compared to a year ago, the department said.

As COVID-19 infections surged in April, several Canadian provinces imposed fresh restrictions, including shuttering or limiting non-essential businesses and closing schools. Cases are beginning to decline, but reopening is still weeks away and economists expect further job losses in May.

Canada has so far fully vaccinated just over three per cent of its nearly 38 million residents, while more than 36 per cent have received a first dose. By the end of June, Canada expects to have received 40 million doses.

Long-term unemployment increased by 4.6 per cent to 486,000 people, which suggests some labour market scarring is beginning to show, said Leah Nord, a senior director at the Canadian Chamber of Commerce.

"The job prospects for displaced workers grow slimmer with every month in lockdown as more businesses throw in the towel," she said in a statement.

Total hours worked fell 2.7 per cent in April, while the number of people working fewer than half their usual hours jumped 27.2 per cent to 288,000.

"The hours worked numbers were I think weaker than had been expected," said Andrew Kelvin, chief Canada strategists at TD Securities.

"I think it suggests a weaker April than the Bank of Canada would have had penciled in."

The Bank of Canada in April sharply boosted its outlook for the Canadian economy and signaled interest rates could start to rise in 2022.

AMERICAN PICTURE

U.S. job growth unexpectedly slowed in April, likely restrained by worker shortages that have left businesses scrambling to meet booming demand as the economy reopens amid rapidly improving public health and massive financial help from the government.

The U.S. Labor Department's closely watched employment report on Friday, which showed a plunge in temporary help jobs - a harbinger for future hiring - as well as decreases in manufacturing and retail employment, could sharpen criticism of generous unemployment benefits.

The enhanced jobless benefits, including a government-funded $300 weekly supplement, pay more than most minimum-wage jobs. The unemployment benefits were extended as part of a massive $1.9-trillion COVID19 pandemic relief package approved in March.

Employment is 8.2 million jobs below its peak in February 2020.

JOBLESS RATE UNDERSTATED

Leisure and hospitality gained 331,000 jobs in April, with hiring at restaurants and bars accounting for more than half the increase. Government employment picked up as school districts hired more teachers following the resumption of in-person learning in many states.

But temporary help services employment dropped by 111,000 jobs. Manufacturing employment fell by 18,000 jobs. A global semiconductor chip shortage has forced motor vehicle manufacturers to cut production.

In transportation and warehousing, employment for couriers and messengers fell by 77,000.

The unemployment rate rose to 6.1 per cent in April from 6.0 per cent in March. The jobless rate has been understated by people misclassifying themselves as being "employed but absent from work." Millions of Americans remain out of work and many have permanently lost jobs because of the pandemic.

BUSINESS

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2021-05-08T07:00:00.0000000Z

2021-05-08T07:00:00.0000000Z

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