Canada adds 1m jobs, but earns only muted cheer

Bloomberg

Canada reclaimed almost one million jobs of those lost to the coronavirus pandemic, a promising start to what’s
expected to be an arduous recovery.
Employment rose by 952,900 in June as lockdown restrictions began to ease, Statistics Canada reported on Friday, adding to the 290,000 jobs created in May. The two-month total represents just over 40% of the 3 million lost in March and April, when mandatory business closures were imposed.
June’s better-than-expected reading will ease concern about how long-lasting the damage from the pandemic will be. But economists warn it could still take years before things return to normal. The Bank of Canada will give new estimates for the outlook when it releases its quarterly Monetary Policy Report on Wednesday.
“While today’s numbers are encouraging, there are almost 1.8 million lost jobs yet to be recovered,” Brian DePratto, senior economist at Toronto-Dominion Bank, wrote in a note. “It is still a long way to the finish line.”
Services-related sectors were responsible for 794,400 of the increase in June, led by retailers and food businesses. The natural resources sector led losses, with about 5,500 new positions eliminated. Gains were about evenly split between full time and part time, with 488,100 and 464,800 added jobs, respectively.
The numbers also reflect gradual reopenings in Ontario and Quebec. Canada’s two most-populous provinces made up two thirds of the June job gains. Ontario, the only province not to post an increase in May, saw an increase of 378,000 positions.
Canada’s currency was little changed on the report, trading at C$1.3589 against its US counterpart at 11:09 am Toronto time. Two-year government bond yields were also little changed.
As impressive as the the employment jump is, the Canadian economy is still digging itself out of a deep hole. While the unemployment rate fell to 12.3% in June, that’s still near historically elevated levels. The 13.7% jobless rate in May was the highest since the Great Depression.
Hours worked rose 9.8% in June, but were still 16% below February levels.