MNI INTERVIEW: Canada May Largely Close Covid Job Gap by Aug

Elevated job postings amid a quickening vaccine rollout suggest solid gains for Canada's June and July employment reports, crucial milestones of the labor market recovery for policy makers, Brendon Bernard, senior economist at Indeed Hiring Lab and a former federal finance department researcher, told MNI.

Hiring was strong following the last major lockdown, including a combined jump of 562,000 jobs in February and March, and there is potential for a similar leap this time, Bernard said. Statistics Canada reports June job numbers Friday at 8:30am EST and market economists predict a gain of around 200,000 positions. Two months of those kind of increases would make up a majority of the 750,000 jobs the central bank says have been lost or not created since the pandemic struck.

The turbocharger this time is a vaccine rollout that while months behind the U.S. is now seeing a solid majority of Canadians receiving their first shot and more starting to get their second. Canada's GDP has also shown resilience in the most recent lockdown, with output down less than the market expected in April and May, leading several economists to boost their Q2 estimates.

"This time is really different in the sense that unlike those periods of re-opening, we have the vaccine," Bernard said. "We're seeing it just in terms of job postings, that employer demand in certain pandemic-imposed sectors, especially food services, is starting to come back after really lagging."

SOLID HIRING APPETITE

Job postings on Indeed broke their pre-pandemic mark back in February and have been climbing since, he said. Other indicators showing Canadians are leaving the house more and booking restaurant reservations also suggest the economy is picking up again, Bernard said.

"We have some pretty solid hiring appetite across a whole range of sectors in the economy, from construction, loading and stocking, tech, healthcare," he said. "More recently what we are seeing is a real pickup in some of the pandemic-exposed sectors, particularly food services."

The federal government is also keeping some enriched jobless benefits in place until September when it expects most willing Canadians to be vaccinated. Finance Minister Chrystia Freeland has said the economy must "punch through" the pandemic rebound and she will only consider pulling back on record deficit spending afterwards. Other sources have told MNI that with an election likely this year and doubts about the job market, fiscal and monetary policy will remain loose for quite a while.

There's too much going on in the economy to figure out if Canada will face a period like many U.S. state governments that find intense worker shortages pressure them to scale back the payouts, he said. Other factors such as fear of new outbreaks can also influence labor supply, he said.

"These June and July numbers are going to be a test because we are going to be in a world of re-opening and getting back to normal," he said. "In contrast, if employment grows at the rate of what a usual recovery from a typical recession is, that implies a long slog."