MNI DATA REACT: Surprise Canada May Job Gain, Record U-Rate

By Greg Quinn

     OTTAWA (MNI) - Canada unexpectedly gained 290,000 jobs in May while a

larger surge of people seeking work again after Covid-19 shutdowns drove

unemployment to a record 13.7%.

     The MNI median was for 15% unemployment and 400,000 jobs lost, and the

modern day high in unemployment was 13.1% set in 1982. The May job increase

follows declines of 1 million and 2 million in March and April, and a 13% April

unemployment rate. 

     "Increases in both employment and hours worked were observed in a range of

industries, including those where working from home is less practical due to

occupation-related requirements to come into close physical contact with

others," Statistics Canada said Friday from Ottawa. "This includes accommodation

and food services, and wholesale and retail trade, the two industries where

March and April employment losses were greatest."

     The job gain is the most hopeful sign yet the economy is turning around

after three months of shutdowns to contain the pandemic, though there are risks

from further waves of illness, bankruptcies and permanent job losses. 

     The unemployment rate including Canadians who wanted work but weren't

looking amid Covid-19 was unchanged in May at 19.6%, the kind of dislocation

unseen outside the Great Depression or postwar demobilization. 

     The May employment gain was rivaled by a 201,000 increase in people who met

the regular definition of unemployment, mostly people who had been recently laid

off and were looking for work again. 

     --HOURS WORKED CLIMB

     Statistics Canada broke out other numbers for a third month to assess the

status of people who were sent home because of health rules and may or may not

have a job to go back to soon:

     --"The number of Canadians who wanted to work but did not look for a job

remained high in May, falling from 1.5 million in April to 1.4 million."

     --"In May, more than one-third (34.8%) of the potential labor force was

fully or partially underutilized, down slightly from 36.6% in April, but

considerably higher than the 11.9% observed in February."

     --Total hours worked -- more closely linked to GDP -- rose 6.3% in May,

following a 28% decline from February to April. The BOC says GDP may drop

10%-20% in the second quarter.

     --Average hours worked in Canada rose slightly to 29.5 hours in May,

compared with 28.2 in April. The average hours worked "still remains well below

the average of 33.0 hours observed in February."

     --The province of Quebec accounted for about 80% of total job gains, as the

second-most populous province opened relatively faster than other regions. Its

231,000 job rise recouped almost 30% of the declines in March and April.

     --"During the May reference week, over 1 in 5 Canadians (22.5%) lived in a

household reporting difficulty meeting immediate financial obligations, up

slightly from April (21.1%)."

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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