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Canada employment continues to rebound in August

Christian Fernsby |
Employment rose by 246,000 (+1.4%) in August, compared with 419,000 (+2.4%) in July.

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Topics: CANADA   

Combined with gains of 1.2 million in May and June, this brought employment to within 1.1 million (-5.7%) of its pre-coronavirus February level.

The number of Canadians who were employed but worked less than half their usual hours for reasons likely related to coronavirus fell by 259,000 (-14.6%) in August. Combined with declines in May, June and July, this left COVID-related absences from work at 713,000 (+88.3%) above February levels.

As of the week of August 9 to 15, the total number of Canadian workers affected by the coronavirus economic shutdown stood at 1.8 million. In April, this number reached a peak of 5.5 million, including a 3.0 million drop in employment and a 2.5 million increase in coronavirus-related absences from work.

The number of Canadians working from home declines for the fourth consecutive month In April, at the height of the coronavirus economic shutdown, 3.4 million Canadians who worked their usual hours had adjusted to public health restrictions by beginning to work from home.

This number has fallen each month since May, when the gradual easing of public health restrictions began, and reached 2.5 million in August.

Among Canadians who worked their usual hours in August, the total number working from home fell by nearly 300,000 compared with July, while the number working at locations other than home increased by almost 400,000.

Employment rose at a faster pace among women (+150,000; +1.8%) than men (+96,000; +1.0%) for the third consecutive month in August.

Core-age men (aged 25 to 54) have been the least affected by the shutdown and their employment level in August reached 96.6% of its February level. Employment among core-aged women, which was hit harder and has been slower to recover, reached 95.6% of pre-pandemic levels, while employment among workers aged 55 years and older reached 94.5% of pre-COVID levels.

Youth (aged 15 to 24) were most affected and remained the furthest from their February employment level, with employment for both young men and young women being at 84.7% of February levels.

All of the employment increase in August was in full-time work, which rose by 206,000 (+1.4%), while the number of part-time workers was little changed.

Nevertheless, full-time employment stood at 93.9% of pre-pandemic levels in August, compared with 96.1% for part-time work. In the months prior to the COVID-19 economic shutdown, full-time employment had reached record highs, while growth in part-time work was relatively flat.

Compared with 12 months earlier, full-time employment was down 5.4% in August, while part-time work decreased 5.1%.

For self-employed Canadians, the COVID-19 economic shutdown and subsequent gradual re-opening of the economy have had a greater impact on total hours worked than on employment.

From February to April, the self-employed experienced relatively modest job losses (-79,000; -2.7%) compared with employees (-2.9 million; -18.0%), but a greater reduction in total hours worked (-41.9% compared with -25.1%). As total employment rebounded from April to July, the number of self-employed workers was little changed, but their total number of hours worked increased notably, reaching 82.1% of pre-COVID levels in July.

In August, self-employment declined for the first time since April, falling by 58,000 (-2.1%). This was mostly the result of declines in the number of solo self-employed—that is, those with no employees (not seasonally adjusted).

In August, 24.2% of the solo self-employed worked less than half of their usual hours, much higher than the share for employees (5.7%), but an improvement compared with 54.5% in April (not seasonally adjusted).

The unemployment rate fell 0.7 percentage points to 10.2% in August. As a result of the COVID-19 economic shutdown, the unemployment rate had more than doubled from 5.6% in February to a record high of 13.7% in May.

By way of comparison, during the 2008/2009 recession, the unemployment rate rose from 6.2% in October 2008 and reached a peak of 8.7% in June 2009. It took approximately nine years before it returned to its pre-recession rate.

The unemployment rate fell most sharply in August among core-aged women aged 25 to 54 years old, down 1.2 percentage points to 7.5%, the lowest unemployment rate among all major groups.

This decline was largely due to employment increases, as overall labour force participation was unchanged from July. The unemployment rate for core-aged men fell 0.7 percentage points to 8.1%, also the result of increased employment, with little change in their labour market participation.

The number of unemployed Canadians declined for the third consecutive month, falling by 137,000 (-6.3%) in August to just over 2.0 million. Nevertheless, this was well above the previous record high of 1.7 million in November 1992 during the recession of the early 1990s.

In any given month, the net change in unemployment is the difference between the number of people becoming unemployed and those leaving unemployment, either because they became employed or left the labour force.

In August, 864,000 Canadians moved out of unemployment while 725,000 entered unemployment. The majority of those who left unemployment became employed (58.3%), while most of those who became unemployed in August (59.2%) had been out of the labour force in July.

Temporary layoffs continue to decline, approaching pre-COVID levels

The unemployed include three main groups of people: those on temporary layoff who expect to return to a previous job within six months; those who do not expect to return to a previous job and are looking for work; and those who have arrangements to begin a new job within four weeks.

The number of Canadians on temporary layoff rose from 99,000 in February to a record 1.2 million in April, before falling to 460,000 by July. In August, the number of Canadians on temporary layoff continued to decline sharply, falling by half (-49.9%) to 230,000.

The net change in the number of people on temporary layoff is the difference between those becoming unemployed on temporary layoff and those leaving that status to become employed, to search for a new job or to leave the labour force.

Just over one-third of those who were on temporary layoff in July became employed in August, while about one-sixth started looking for work and one-sixth left the labour force (not seasonally adjusted). â– 

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