- Employment increased for a fourth straight month, up 246k in August. This means that total employment is now only 5.7% below its pre-pandemic (February) level. The labour force had a more moderate rise, increasing by +109k, leading to a lower unemployment rate of 10.2% (July: 10.9%).
- Hours worked also improved in August, rising by 2.9%. More Canadians saw their hours normalize last month, as those who were working less than half their usual hours due to COVID-19 fell by 259k. The “labor underutilization rate” continued to decline in August, dropping to 20.3% from 22.4% in July, but remained significantly higher than what it was in February (11.2%).
- The services sector drove the increase in employment last month, up 218k. Behind this were improvements in educational services (+51k), accommodation and food services (+49k) and other services (+38k) employment. Meanwhile, the goods-producing sector added 28k jobs in August, thanks to gains in manufacturing (+29k) employment.
- Encouragingly, almost all of the pickup in employment was in full-time work (+206k), while there was no material change to the number of part-time workers. As a result, full-time employment was 93.9% of pre-pandemic levels, and part-time work was slightly higher at 96.1%.
- The labour market picture improved across nearly every province but Alberta and New Brunswick. Ontario led the way adding 142k jobs (almost all in full-time work), followed by Quebec, where employment rose by 54k. British Columbia saw 15k in new jobs and employment in Nova Scotia was up 7.2k. However, in Alberta and New Brunswick there were no significant changes to employment in August.
- Employment rose at a faster rate for lower-wage workers in August compared to all other employees. Still, employment for this population remains well below (87.4%) below pre-pandemic levels, while it has nearly recovered for higher paid workers (99.1%).
Key Implications
- The Canadian labour market continued its upward climb, adding jobs for a fourth consecutive month in August. Reopening of economies and the resulting unleashing of pent-up demand have helped propel job gains over the past four months and as of August, nearly two-thirds of the job losses in March and April have been recovered.
- Sectors least affected by the pandemic have regained a good share of lost jobs. Conversely, those most affected (transportation, accommodation and food services, and information, culture and recreation services) remain in the doldrums. Excluding these sectors, employment last month was at 96% of where it was in February.
- Looking ahead, it will be difficult for the labour market to maintain the current pace of job gains. Employment growth has already started to slow and pandemic-related uncertainty is weighing on business hiring decisions. Indeed, future employment improvements will be closely tied to the path of the virus. This final third could be the longest stretch in the road to recovery for Canada’s labour market.
