Largely due to school re-openings allowing parents to return to work, Canada’s economy is showing better than anticipated job growth. Canada added 378,200 jobs in September, more than double the median forecast of 150,000. With five straight months of job gains, Canada’s labor market has now recovered three-quarters of the 3 million jobs lost during March and April. September’s unemployment rate also fell to 9% from 10.2% in August. Economists were expecting an unemployment rate of 9.8%. These figures are extremely positive for Canada and show that the labor market is recovering faster than anticipated. The recovery in jobs has been mostly in full-time work, with breadth across all industries. The education sector notably added 68,300 jobs for the month.
Women aged 25 to 54 were the main catalyst for the surprising job numbers. This demographic saw their unemployment rate drop to 7% in September, which was the lowest rate among the major demographics, and the closest to pre-covid levels.
It’s very uncertain, however, if this recovery is sustainable. Canada is heavily in the midst of a second wave of Covid-19 and is shattering daily records for new cases. After the delayed data from last weekend came in, it revealed that Canada broke their daily record for new coronavirus cases. On October 25th, Canada for the first time reported over 3,000 new cases. As countries like France and Germany reimpose lockdown measures, some cities in Canada have followed suit and reimposed restrictions. Many businesses have been forced to shutter again in order to slow the spread and curb the outbreak. If these restrictions continue and gradually become more stringent, all the progress made during the current recovery could be all for nothing. It’s possible that even more damage could be done to the labor market if this pace continues.