The April numbers for Canada’s and Alberta’s labour market are brutal and tell the story of the devastating impact the COVID-19 pandemic is having on the economy.
According to data released by Statistics Canada on Friday, Canada lost nearly two million jobs in April as the unemployment rate spiked by 5.2 percentage points to 13 per cent.
In Alberta, job losses totalled 243,800 with the unemployment rate jumping from 8.7 per cent to 13.4 per cent. The Calgary census metropolitan area saw 42,700 jobs lost with unemployment rising from 8.6 per cent to 10.8 per cent.
StatsCan figures show that employment in the province is down by 381,900 positions from a year ago and it’s down by 75,100 in the Calgary region.
In its daily economic update, The Owl, ATB Financial’s Economics & Research Team, said Alberta’s labour force contracted by 6.2 per cent in April. Not including March, when it fell by 3.5 per cent, the next largest monthly decrease in the labour force was 1.0 per cent in October 1984, it said.
“This means that the pandemic-related shutdowns have led many Albertans to drop out of the labour force altogether. The unemployment rate does not include ‘discouraged workers’ who have stopped looking because they don’t think they will find a job. If we include Albertans who want to work but are not in the labour force, the unemployment rate would be a whopping 20.4 per cent,” said ATB.
“The total number of hours worked has also changed dramatically in April. Unadjusted for seasonality, the number of hours worked (main jobs only) in Alberta fell by 25.7 per cent in April compared to February.”
The federal agency said the total employment decline in Canada since the beginning of the COVID-19 economic shutdown is over three million.
“In addition, the number of people who were employed but worked less than half of their usual hours for reasons related to COVID-19 increased by 2.5 million from February to April. As of the week of April 12, the cumulative effect of the COVID-19 economic shutdown—the number of Canadians who were either not employed or working substantially reduced hours—was 5.5 million, or more than one-quarter of February’s employment level,” added the federal agency.
“The magnitude of the decline in employment since February (-15.7 per cent) far exceeds declines observed in previous labour market downturns. For example, the 1981-1982 recession resulted in a total employment decline of 612,000 (-5.4 per cent) over approximately 17 months.”
The hike in the national unemployment rate followed an increase of 2.2 percentage points in March. Over the period since comparable data became available in 1976, the April unemployment rate was second only to the 13.1 per cent observed in December 1982, explained StatsCan.
“The April unemployment rate would be 17.8 per cent, when adjusted to reflect those who were not counted as unemployed for reasons specific to the COVID-19 economic shutdown. During the week of April 12, 1.1 million people were not in the labour force but had worked recently (in March or April) and wanted to work. They were not counted as unemployed but were counted as not in the labour force because they did not look for work, presumably due to ongoing business closures and very limited opportunities to find new work,” it said.
“Total unemployment grew by 1,285,000 (+113.3 per cent) from February to April. By comparison, during the 1981-1982 recession unemployment rose by 763,000 (+88.6 per cent) over the course of 16 months. In April, almost all (97.0 per cent) of the newly-unemployed were on temporary layoff (not seasonally adjusted), indicating that they expected to return to their former employer as the shutdown is relaxed.”
The two-month job loss of almost 16 per cent of the work force and the 28 per cent drop in total hours worked give a clear reading on how deeply the shutdowns hit the economy, said Doug Porter, Chief Economist with BMO Economics.
“Given that the April survey was conducted mid-month, and there have been some secondary layoffs since, the May survey (conducted next week) may only capture a few of the re-opening positions. As a result, it’s possible that reported employment falls somewhat again next month (but not in the same league as March/April), and the jobless rate ticks higher. Still, assuming that the cautious re-openings continue, we should see a large rebound in employment in June and July.”
One in seven. That’s roughly how many Canadians lost their job on net since February, said Brian DePratto, Senior Economist with TD Economics.
“One in four is how many either lost their job, or most/all of their hours. The scale of the needed pandemic response has been such that odds are that most of us know at least one, if not several people who’ve had their lives disrupted as a result. We have to go back to the Great Depression to find similar numbers, and even then the speed at which the current episode unfolded seems to have no identifiable precedent,” he said.
