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The Canadian economy lost 68,000 jobs in May, which is the second consecutive month of unemployment.
The Canadian labor market has been weak for the second consecutive month due to extensive restrictions to control the third wave of Covid-19.
Statistics Canada reported in Ottawa on Friday that the economy lost 68,000 jobs in May. This adds to the 207,100 jobs lost in April. The unemployment rate rose from 8.1% to 8.2%. Economists surveyed by Bloomberg had predicted that 25,000 jobs would be lost, with an unemployment rate of 8.2%.
Despite monthly setbacks, analysts expect a rapid rebound as early as this month as the containment measures are lifted. In recent weeks, the two largest provinces, Ontario and Quebec, have gradually reopened, the speed of vaccination has increased, and the number of cases has decreased.
Beginning with the restrictions in December last year, the country experienced two major Covid-19 lockdowns in the winter months, hindering restoration efforts. The 270,000 jobs lost in the second wave of the epidemic were fully restored in just one month after the restrictions were lifted in February. Economists expect the same recovery this time.
Eric Russels, chief economist at Royal Bank of Canada Global Asset Management, said on BNN Bloomberg TV: “We are now seeing the third wave-unemployment in April and May-compared to the first The number of unemployed in the second wave is slightly higher.” “At least it is comparable, which makes sense. We have seen a considerable blockade in this round.”
The current wave coincides with the new restrictions that began in April. Many provinces maintained restrictions on Covid for most of May as they tried to control the third wave of the virus.
Economists predict that as businesses reopen and consumers resume participating in face-to-face events, there will be a healthy rebound in the second half of the year, although some concerns are spreading and may undermine any rebound.
Employers are struggling to cope with the shortage of the US labor market is one of the reasons for concern, because many workers south of the border choose to stand by because of childcare obligations, increased unemployment benefits, and skill mismatches. Canada’s labor force participation rate was 64.6%, falling to its lowest level since August for the second consecutive month.
Market Reaction
The Canadian employment report was released at the same time as the release of the US employment data. The number of US jobs increased by 559,000 last month, lower than the 675,000 expected. Canadian government bonds rose. As of 9:39 am in Toronto, the 10-year Treasury bond yield was about 3 basis points lower than Thursday’s level to 1.49%. The five-year yield fell to just under 0.9%. The Canadian dollar rose 0.3% against the U.S. dollar to 1.2076 Canadian dollars.
Doug Porter, chief economist of the Bank of Montreal, said in a report: “Although we continue to look forward to a strong rebound in employment throughout the summer and autumn, the slow employment recovery in the United States sounds like a warning sign.” Investors.
The possibility of a sharp rebound and a faster-than-expected full recovery have prompted the Bank of Canada to start cutting stimulus measures and warning interest rate hikes.
Canada’s economy is still 571,100 fewer jobs than it was before the pandemic. The unemployment rate before the pandemic was below 6%.
The decline in May was mainly due to part-time workers, and the number of employed persons fell by 54,200 that month. The number of full-time employees fell by 13,800. There is almost no change in working hours this month.
(Update analyst comment in paragraph 10.)
– With the assistance of Erik Hertzberg.
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