The Latest Unemployment Rate Fell and New Jobs Added - September 10, 2020

The Latest Unemployment Rate Fell and New Jobs Added

 

Last Friday, Statistics Canada released August statistics that highlighted the fourth consecutive month of economic gains after job losses spiked during the lockdown in March and April. The unemployment rate fell 0.7 percentage points to 10.2% in August.

According to Statistics Canada,
 

“As a result of the COVID-19 economic shutdown, the unemployment rate had more than doubled from 5.6% in February to a record high of 13.7% in May. By way of comparison, during the 2008/2009 recession, the unemployment rate rose from 6.2% in October 2008 and reached a peak of 8.7% in June 2009.”

These gains bring the overall number of Canadians unemployed to within 1.1 million of pre-pandemic levels. And the rebounds suggest that federal aid is not a disincentive for people to look for work. In fact, the participation rate in August, which is a measure of all employed Canadians and those looking for work, is now almost back to February 2020 levels. Andrew Grantham, CIBC Senior Economist reports that is a sharper rebound than many expected.

Though it is difficult to look at this as great news when over a million Canadians are still without work, the number of unemployed is lower than what many experts projected just a few months ago.

What Happens Going Forward?

The overall economic outcome will be determined by how quickly we can contain the virus. In their recent Canadian Outlook Economic Forecast report, the Conference Board of Canada concludes that,
 

“With the worst of the recession likely over, the outlook for 2021 is brighter. The economy is forecast to rebound by 6.7 per cent in 2021 and 4.8 per cent in 2022.  As the threat of the pandemic eases, how well the reopening of the economy and the withdrawal of government support is managed will be a crucial determinant of the economy’s trajectory over the next several years.”

Bottom Line

There are still millions of Canadians struggling through this economic downturn. There is, however, light at the end of the tunnel. The unemployment situation did not get as bad as many predicted, and the recovery is taking place faster than most thought would happen.

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