Canada’s labour market got a massive boost in September, taking employment back to levels seen before the COVID-19 pandemic upended the economy.
The country added 157,100 positions last month, building on a gain of 90,200 in August, Statistics Canada said Friday. Hiring was considerably stronger than the 60,000 positions that economists were expecting. The unemployment rate fell to 6.9 per cent from 7.1 per cent.
In September, around 19.13 million people were employed – the same as in February, 2020, marking a significant milestone in the country’s recovery from the pandemic.
The Canadian situation stands in stark contrast to the United States, which reported an increase of 194,000 jobs in September – well short of the 500,000 that were expected. U.S. employers are struggling to fill a record 11 million job openings, despite high levels of unemployment.
The Canadian report brought a number of welcome developments.
Women have seen employment surpass prepandemic levels, after a gain of 99,700 positions last month. Men are around 12,000 jobs shy of accomplishing the same.
As well, the labour force participation rate – broadly, the share of people either working or looking for a job – increased 0.4 percentage points to 65.5 per cent, marking a full rebound.
The recovery “was undoubtedly much faster than almost anyone would have dared predict in those dark days” of spring 2020, Bank of Montreal chief economist Doug Porter said in a research note.
“There are few blemishes on this report,” he added.
Still, there is work ahead. Because of population growth over the past 19 months, the employment rate of 60.9 per cent is down 0.9 percentage points. At today’s population, another 272,000 jobs are needed for a full recovery. Meanwhile, the number of long-term unemployed remains high, posing a challenge for policy makers.
“Reaching the prepandemic level of employment is a remarkable milestone,” Royce Mendes, senior economist at CIBC Capital Markets, said in an interview. “But, it is a far cry from mission accomplished.”
The September gains were entirely in full-time work, and mostly in the services-producing sector. Every province but Newfoundland and Labrador notched an increase in employment. The hiring was roughly split between the public and private sectors, the latter of which has now returned to prepandemic levels of employment.
The job market got a temporary lift from the federal election. Employment rose by 13,000 in the occupational group that includes election enumerators and poll clerks.
The numbers also benefited from a statistical quirk. Because there were fewer seasonal workers losing jobs at the end of summer, this had the effect of boosting the seasonally adjusted change in employment. This factor accounted for roughly one-third of the September gain, research firm Capital Economics estimated.
While some segments of the labour market are thriving, others are struggling greatly.
A prime example is self-employment, which fell 19,300 in September, part of a lengthy slide that’s left it down 8.4 per cent (241,000 workers) from February, 2020.
The hospitality industry, which has struggled to hire and retain workers, lost 26,700 in September. Employment in that industry is down 14.8 per cent over the pandemic. Only agriculture has fared worse, down 20.2 per cent.
As of September, 389,000 people were continuously unemployed for 27 weeks or more, more than double from when the pandemic started. Many others want work, but aren’t actively looking. While improving, the unemployment rate (6.9 per cent) remains above the 2019 monthly average of 5.7 per cent.
The labour market is heading into an uncertain period. Several federal programs are slated to expire this month, including wage subsidies and some income supports. Already, the number of people receiving jobless benefits via employment insurance fell more than 800,000 in September, with many exhausting their coverage. Those individuals may qualify for the Canada Recovery Benefit, though it’s only running for about two more weeks.
Finance Minister Chrystia Freeland recently said the federal government is discussing its options for extending business supports beyond the Oct. 23 expiration date.
Mr. Mendes noted that parts of the country – notably Alberta and Saskatchewan – have struggled with COVID-19 cases of late, which complicates the recovery process.
“It’s a little bit of a bifurcated economy at this point,” he said. “The decision is not so easy just to end the supports and not renew them.”
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