E-Sight December 4: Canadian employment posts a strong gain in November, but new restrictions are forcing workers out of the labour market

Canadian employment increased by 62,100 in November. While this is good news, a closer look shows that COVID-19 is shrinking the Canadian labour market. With new restrictions making it harder to find work in people’s regular industries, some workers are choosing to exit the market. In fact, on net, 19,500 workers left the labour force in November. Participation in the labour force tends to decline during recessions, but unique characteristics of the pandemic mean that labour force activity is being determined by government actions. 

Job gains this month were driven by full-time employment, rising by 99,000 in November. However, renewed lockdowns took its toll on part-time employment, losing 37,400 jobs. The job creation pushed the unemployment rate lower to 8.5%, but some of the decline also reflects workers leaving the labour market and not counting as either employed or unemployed, which is a negative development.

Despite the renewed business restrictions in November, total hours worked increased 1.2%.   This is welcome news as it makes it more likely that the economy continued to grow. Since February, there has been a 55.5% increase in Canadians who are employed but worked less than half their usual hours. It is likely that these workers will increase their hours worked over time.

Categories: E-Sight, Economics

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