Employment in Canada cratered in March, wiping away more than three years of job creation in a month and underlining the economic pain the COVID-19 pandemic has delivered in North America.
The Canadian economy shed 1.01 million jobs on a seasonally adjusted basis, Statistics Canada reported. The March result smashed the previous record for a one-month job loss, which was January 2009, at the height of the global recession, when the economy lost 125,000 positions.
The record plunge was anticipated after officials here revealed that in the span of roughly a month, about 20 percent of the country’s labor force applied for jobless benefits and income support after authorities ordered sectors of the economy shut down to help curb the spread of the virus.
The government responded with more than $100 billion Canadian ($71 billion U.S.) in direct support to individuals and businesses. Combined with other measures such as deferred tax payments and loan guarantees, the total Canadian fiscal response package represents 11 percent of the country’s gross domestic product.
“As shocking as these numbers are, the big issue is how long do the shutdowns last, and thus how persistent is this spike in joblessness,” said Douglas Porter, chief economist at BMO Capital Markets.
Prime Minister Justin Trudeau said last week the current standstill in economic activity—which includes the compulsory shutdown of nonessential businesses—could last weeks or months.
Canada’s job drop in March, adjusted on a proportional basis, is the equivalent to over eight million U.S. jobs lost.
Canada collected data for the March jobs report a week later than the U.S. nonfarm payroll report. As a result, Canada’s jobs report “might have captured more of the sudden-stop in activity, and on a relative basis might mean there’s at least slightly less downside in the Canadian numbers left to show up than those” in the U.S., said Avery Shenfeld, chief economist at CIBC Capital Markets.
Source: Wall Street Journal