The Canadian economy lost more than one million jobs in March, Statistics Canada said Thursday, pushing the unemployment rate to 7.8 percent.
Economists had estimated the figure to come in at around 500,000 lost jobs, which had been the worst month for job losses on record.
Every month, the data agency surveys Canadians for one week to get a job number for that month.
March data were taken from a survey of the week that began March 15 – a tumultuous week for Canadians, because in seven days, Canadians switched from packing a March vacation vacation to taking refuge in a place when businesses across the country locked themselves in to try to refrain from spreading COVID -19.
According to Statistics Canada, 19.2 million Canadians paid jobs in February before the corona virus hit Canada in full force. A month later, almost 18 million still have jobs.
Losing actual work can be far worse
The actual picture of employment might be worse. The data agency noted that above one million people were officially unemployed during the month, another 1.3 million Canadians did not work for a fee because they were locked but technically still considered themselves to have a job.
Another 800,000 Canadians work less than half of their usual workload.
And 219,000 more people were employed at the beginning of March but were deemed no longer employed as the survey week arrived.
“They do not count as unemployed because they are not looking for work,” Statistics Canada said, “maybe because of the closure of the ongoing business and the requirements to be socially isolated.”
If these people are considered unemployed, Canada’s official unemployment rate is 8.9 percent for the month. As it stands, the official unemployment rate jumped by 2.2 percentage points to 7.8 percent. It was the biggest monthly increase in the unemployment rate in records dating from 1976.
Statistics Canada said a dramatic almost equal reduction in economic activity and employment seen by the country last month was a possible 1998 ice storm that caused businesses in Ontario and Quebec to suddenly close stores.
The ice storm caused 166,000 people in Canada to temporarily lose all or most of their paid work. Last month’s figure was eight times higher than that.
Before Thursday’s figures, the worst month ever for jobs in Canada was January 2009, when the economy lost 124,400 jobs. March 2020 figures erase that number.
Low-paying jobs are likely to disappear
The biggest chunk of job loss came in the accommodation and food services sector, which shrank by almost a quarter. The next hardest hit sectors were IT, arts and culture, which lost 13 percent of their jobs. Education was hit nine percent, while wholesale and retail trade lost seven percent.
Almost every sector loses jobs, except for natural resources and agriculture, which adds almost 7,000 jobs as activities increase keep Canadian food supply chains strong.
Jobs in restaurants, hotels and retail account for about half of all job losses, and lower paying jobs are initially more likely to be cut during the month.
Nearly half of the jobs lost were paid positions less than two-thirds of the average paid worker, because 496,000 people who were considered by low-level data workers to lose all or most of their work during the month.
“The first workers who experienced job losses due to COVID-19 were among those who were least able to withstand economic difficulties,” Statistics Canada said.
Young people and women are also disproportionately affected, with people aged between 15 and 24 losing 392,500 jobs during the month, and women in their core years of work, between 25 and 54, losing 298,500 jobs.
The ice storm analogy might be appropriate, because economists get their first glance at the cold that has settled in the Canadian labor market.
“Today’s numbers are only the first portrait of a deep freeze that has plagued the Canadian labor market,” said Brendon Bernard, an economist with an online job market.
“After a month away from social, the huge decline in Canadian employment is not surprising, but the steepness is still shocking.”
Each province lost jobs, but two-thirds of the damage came in Ontario and Quebec, which lost 403,000 and 264,000 jobs respectively.
Amazing job loss means that the 40-month increase in employment was erased in a single strike, and “the decline may be even greater in the report next month,” said Bank of Montreal economist Doug Porter.
Reasons for hope?
If there is a slight positivity in numbers, perhaps most job losses could be temporary, because Statistics Canada observes that “workers are expected to return to their jobs within six months.”
“How surprising these numbers are, the big problem is how long the shutdown lasts, and thus how persistent this surge in unemployment is,” Porter said. “That is still very open for debate.”
While the coming months are likely to have their own figures, TD Bank economist Brian DePratto said there is reason for cautious optimism that an unprecedented government support program might work.
“Early signs that some the company might reverse the layoff decision as a result promising, “he said.” Maintaining an employer-employee relationship will likely help accelerate economic recovery when we reach the other side of the pandemic. “
Hassan Yussuff, head of the Canadian Labor Congress, said the data explained that the government support program needed to do even more.
“At the moment, working people need secure and adequate income, rent and mortgage assistance, and a reduction in bank and credit card costs,” he said. “Emergency benefits and wage subsidy programs are an integral part of keeping jobs and earning money for many of these workers, but the scope only needs to be expanded.”