Has Canada's labour market recovery hit a standstill?

Canada’s jobs market recovery might be short-lived as June employment figures showed little change from May, according to a Bloomberg survey.

The Bloomberg-Nanos poll found that only 30% of Canadians who endured job losses or reduced hours have returned to regular employment as of the end of June – a level virtually identical to that seen during the previous month.

“The survey suggests that the initial pickup has not continued,” said Nik Nanos, chief data scientist at Nanos Research.

Nanos said that this is a grim indicator of almost no labour recovery in the interim, and that the impact of the COVID-19 pandemic is significantly worse than anticipated. As of May, unemployment stood at a historic high of 13.7%.

This, combined with immigration pressures, will likely have a major influence on the Canadian housing market, a late-June Reuters study found. Home prices might see just 1.5% growth in late 2020, which was significantly lower than the 4.5% projection earlier this year.

“Employment ... will be influenced by our domestic handling of the pandemic, the quality of economic recovery among our key trading partners, and re-opening our borders to countries that are our primary sources of tourists and international students,” said David Stroud, chief executive at the Vancouver-based property advisor Mortgage Sandbox. “With so many conditions required to return to pre-COVID activity levels, it is likely the recovery will be slow, gradual, taking a few steps forward and sometimes a step back.”

MBN

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