- Following two months of stellar gains, the Canadian labour market lost 207k jobs in April, more than the consensus expectation for -162.5k. This left employment 2.6% below the pre-pandemic (February 2020) level. Losses were concentrated in full-time work (-129k), while part-time employment (-78k) also fell in April.
- Along with employment, Canada’s labour force shrank in April, declining by 84k. Due to the larger fall in employment, the unemployment rate rose to 8.1%.
- Job losses were widespread across industries. Unsurprisingly, the services sector saw the steepest decline in April (-195k). Restrictions resulted in losses in retail (-84k jobs), accommodation and food services (-59k), and information, culture and recreation services (-26k) in April. The goods sector also lost jobs on the month (-12k), with construction (-13k) and agriculture (-4k) driving the decline.
- On a provincial basis, the pullback in employment was mainly in Ontario and B.C. Ontario saw the biggest dip, losing 153k jobs in April, while employment declined by 43k in B.C. Conversely, Saskatchewan (+10k) and New Brunswick (+4k) saw employment gains in April.
- Total hours worked also fell (-2.7%) with losses in educational services, accommodation and food services, and retail trade.
Key Implications
- The Canadian labour market took a tumble in April due to a tightening public health measures imposed in the month across much of the country. April’s losses reversed a significant share of the robust job gains seen in February and March. As expected, the retail industry bore the brunt of the decline, accounting for 40% of the total loss in employment last month.
- Also notable in today’s release was a decline in total hours worked, indicating a possible reversal in the overall economic recovery in April. Indeed, out of 16 industries, only public administration, finance, insurance and real estate, and professional, scientific, and technical services posted meaningful gains last month.
- With restrictions remaining in place across the country, Canada’s labour market recovery will probably not fully course correct in May. The snapback could occur in June however, as the vaccination rollout ramps up, and caseloads gradually decline in large parts of the country. Better days are ahead for the Canadian labour market, but it may take a little longer to get there.
