MNI PREVIEW: Canada May Jobs Seen -400K, Unemployment 15%

By Anahita Alinejad

     OTTAWA (MNI) - Canada's labor market is expected to show a third steep

decline in May as most health-related shutdowns were extended, with a slower

pace of job losses not enough to prevent unemployment from reaching a record

15%. 

     The unemployment rate seen in the MNI economist median is up from April's

13%. Job losses are expected to slow to 400,000 from record declines of 2

million in April and and 1 million in March. The figures are harder to interpret

because millions of Canadians who didn't qualify for regular jobless benefits

filed for special relief payments, and people unsure of when things safely

re-open may not be actively looking for work. 

     Unemployment in April was 17.8% when adjusted to reflect those who were not

counted as unemployed for reasons specific to the COVID-19 economic shutdown,

Statistics Canada's last report said.  

     The federal government paid CAD42.5B as of June 1 to applicants who lost

their jobs due to COVID-19 pandemic or were temporarily laid off, and 8 million

people applied for these aids. Based in part on such figures, MNI calculations

show the real jobless rate could reach 19.5% in May.

     --CASH STARVED

     During the third consecutive month of shutdowns, concerns around permanent

job loss and bankruptcies are increasing, as some businesses don't have the cash

to survive that long according to an industry group survey. 

     While some provinces have allowed some businesses like golf courses to

re-open in May, some regions have reversed those decisions or extended states of

emergency. That suggests a rebound in June could be limited.

     Given the unique job situation, investors have also focused on measures

such as the decline in hours worked and wages to get a better handle on how bad

the economic shock is. 

--MNI Ottawa Bureau; +1 613 981-1671; email: anahita.alinejad.ext@marketnews.com

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