The third wave restrictions cut heavily into Canadian employment in April, mostly in line with expectations. However, in contrast to the mild impact on growth from second-wave restrictions, the latest drop may leave more of a mark on the broader economy, with full-time positions also hit this time. On a less downbeat note, the employment-to-population rate remains a full point above January’s level (at 59.6%). The participation rate is also higher than in the second wave at 64.9% (albeit down a bit from the pre-pandemic trend of 65.5%).
Looking ahead, as in prior waves of virus spread, employment will rebound once the government can ease containment measures. And that light at the end of the tunnel is getting closer, with vaccination rates ramping up. In the meantime, government support programs for those losing work remain in place and help put a floor under household purchasing power.
Canada’s economy remains about half a million jobs shy of pre-pandemic levels. The Canadian dollar rose to 82.36 cents US after the report. The yield on Canada’s 5-year bond yield dipped to 0.894%, down a few ticks from Thursday’s close.
The U.S. Labor Department also released soft jobs data Friday that were even more disappointing. U.S. payrolls increased by just 266,000, versus estimates for a 1 million gain.