Jobs rebound slowdowns restrained by new business closures

Last month, Canada’s economy created 83,600 new jobs, marking the smallest number since the economic recovery started in May. The reason for such a drop was the second wave of coronavirus cases and new lockdowns.

Meanwhile, September showed 378,000 new jobs added, while the average increase for the previous 6 months was 395,000. At the same time, economists predicted 75,000 new jobs.

More COVID-19 cases led to closing businesses again in Montreal, Toronto and Ottawa. As a result, we’ve seen a new wave of job losses. However, the recovery headed towards a potential slowdown even before the recent hike in virus cases. Following a strong rebound, the economy is expected to show a slower recovery which may take years.

“Overall, the October result is good news, especially amid the losses in the Quebec hospitality sector,” – noted Doug Porter, chief economist at Bank of Montreal. “Nevertheless, job growth will be difficult in the nearest future, particularly amid the new restrictions in many provinces.”

Still, 1.1 million Canadian workers don’t have jobs or have seen their working hours cut sharply because of the pandemic.

The unemployment rate was down from 9% in September to 8.9% last month. Canada’s labor market has offset 2.4 million (79%) of the 3 million jobs lost in March and April.

Certain industries have successfully returned to their pre-pandemic levels: wholesale trade, scientific and technical services and educational services. Meanwhile, accommodation and food services saw a decline of 48,000 jobs, marking the first loss in five months caused by the new restrictions on restaurants and bars in Ontario and Quebec. The largest drop of this segment was reported in Quebec, and Ontario almost didn’t show any changes.

The report also pointed to the signs of permanent damage in the labor market with the long-term unemployment (Canadians who have been unemployed or on temporary layoff for at least 27 weeks) growing in September and October. Last month, the long-term unemployed accounted for 25% of all unemployed people. The latest monthly hike in long-term unemployment is the largest on record.