UPDATE 3-Canada loses more jobs in May, but summer hiring boom looms
(Redesign on June outlook, adds analyst comments)
By Julie Gordon
OTTAWA, June 4 (Reuters) – Canada lost more jobs than expected in May amid continued closures to curb a severe third wave of COVID-19, data showed Friday, but economists did not Delayed in predicting a wave of hires in June as these restrictions eased.
Some 68,000 jobs were lost in May, according to Statistics Canada, more than the analyst average expected a loss of 20,000. The unemployment rate climbed to 8.2%, in line with expectations. Employment is now 3% below pre-pandemic levels, Statscan said.
“Hopefully this will be the last estimate we have before we kick off a wave of hiring activity starting in June,” said Derek Holt, vice president of capital markets economics at Scotiabank.
Many Canadian provinces ease restrictions as new COVID-19 infections collapse and more Canadians receive their vaccines. Canada administered the first doses to approximately 60% of its adult population, of which just over 6% were fully vaccinated.
This should reinforce the reopening of ‘high-contact’ service sectors, where employment remains most below pre-pandemic levels, with hiring expected to increase in the coming months as companies respond to an increase in pent-up demand.
“With households sitting on an unusually large stock of savings built up during the pandemic, this recovery could accelerate relatively quickly over the summer,” Nathan Janzen, senior economist at RBC, said in a note.
While the Canadian economy has not withstood the third wave of infections as well as the second, the boom expected in the second half of the year should allow the Bank of Canada to beat the disappointing May figures, the researchers said. economists.
“The Bank of Canada will take a hard look at it,” said Holt. “(The data) will be less volatile as we move into the second half of the year.”
The Bank of Canada is expected to scale back its asset purchase program again in the third quarter and has indicated it could start raising rates as early as the end of 2022.
Both part-time and full-time employment fell in May, and jobs were lost in the goods sector for the first time since April 2020.
Long-term unemployment remained relatively stable, while the participation rate of senior-aged women fell for the second consecutive month in May, falling below pre-pandemic levels.
The Canadian dollar traded 0.2% to 1.2082 against the greenback, or 82.77 cents US, as the US dollar lost ground significantly. (Reporting by Julie Gordon in Ottawa; additional reporting by David Ljunggren in Ottawa, Nichola Saminather and Fergal Smith in Toronto; Editing by Hugh Lawson, Chizu Nomiyama and Angus MacSwan)