The Canadian employment report showed lower than expected readings on Friday and the second consecutive month of job losses. According to National Bank of Canada analysts, Canada continued to see a third wave of weakness in the labour market with a substantial employment decline following a significant drop in April.
Key Quotes:
“The third wave of the pandemic perpetuated itself into the reference week of the May Labour Force Survey. Canada continued to see a third wave of weakness in the labour market with a substantial employment decline following a significant drop in April (employment is now at 3% of its previous peak). It should come as no surprise that high contact service sectors were negatively hit by sanitary measures (trade, accommodation/food services, information/culture/recreation, education and other services). Although these sectors were responsible for a portion of the loss, there was some contagion to sectors less directly impacted by restrictions. Indeed, the goods producing sector declined for the first time since the worst month of the pandemic (April 2020) with manufacturing posting its first weakening since that same month.”
“As restrictions gradually ease in June with vaccination objectives far ahead of expectations, the floodgates could open with students and furloughed workers rushing back to work. We expect sectors most impacted by the pandemic to rebound strongly in the summer months. Thus, the recent soft patch should turn out to be transitory and the re-opening of the economy ought to support hiring in the months ahead.”
