New job numbers came out on Friday and they show that while jobs are coming back, the pace of recovery is slowing.
Key numbers:
Key numbers:
- Canada added 245,800 jobs in August
- Unemployment fell from 10.9% to 10.2%
- 64% of the jobs lost between February and April have now returned
Key takeaways:
- While jobs are coming back, August's job growth was significantly less than seen in June (953,000 new jobs) and July (419,000 new jobs).
- This suggests that the recovery is entering a new phase where job growth will be harder to come by.
- The labour market is still very weak and the current jobless rate is still above the peak of the 2008-09 recession.
- Job growth has been very uneven: for low-wage workers, employment is at 87.4% of pre-COVID levels vs. 99.1% for other workers.
Why is job recovery slowing down?
The jobs that came back in June and July were the lowest hanging fruit: positions that had been temporarily eliminating during the lockdown and were immediately regained when businesses were allowed to open.
But COVID has permanently affected many businesses and sectors of the economy. Some have shut down since February. Demand is also lower in certain sectors. Recovering jobs lost because of these factors will be harder and slower.
What's next?
The fall will be a big test for the jobs recovery. Some of the biggest factors that will determine whether job growth continues are:
- Whether schools and daycares can stay open permanently, freeing people up to get back to work.
- Whether there is a significant second wave of COVID that leads to another lockdown.
- To what extent government relief measures and stimulus programs are extended or expanded.
- What sort of progress happens on a vaccine and treatments for COVID.
The bottom line: the final quarter of this year is shaping up to be a key period for our economic recovery.