TORONTO (Reuters) – Canada lost a record-breaking 2 million jobs in April while the unemployment rate surged to a near-high 13%, official data showed on Friday, showing how much damage coronavirus-related shutdowns have done to the economy.
NATHAN JANZEN, SENIOR ECONOMIST, ROYAL BANK OF CANADA:
“It is a weird world that we live in where employment is a big upside surprise relative to what expectations were, but it is still obviously bad. You have two million people out of work. It’s also they worked for a lot less hours than they normally would. This is still consistent with a really, really sharp drop in output or another big decline in overall economic activity in April.
“There are some (hopeful signs). Statistics Canada was reporting a larger share of the unemployment increase was in temporary layoffs, so workers are maintaining some contact with their employer and if their employer is still in business, planning to reopen once the shock is over. And also there are some green shoots out of other data … so the depths of the downturn that we are hitting is unprecedented, but it does also look like we are getting to the bottom of that economic downturn.”
DOUGLAS PORTER, CHIEF ECONOMIST, BANK OF MONTREAL:
“I think consensus was very heavily influenced by some of the gargantuan numbers we’d seen from the Canadian Emergency Response Benefit, which indicated more than 7 million Canadians had applied for that relief.
“The number does make sense in that it’s not wildly different from what we saw in the U.S., at least on the U.S. payroll number. What that suggests is the two economies are seeing a roughly similar performance in terms of how much of the economy is being shut down.”
ANDREW KELVIN, CHIEF CANADA STRATEGIST, TD SECURITIES:
“It’s encouraging just on face seeing fewer jobs lost than we had feared. The unemployment rate at 13% is not something to be excited about but it’s a lot better than feared. I would say that the jobs figures probably understate the weakness in the economy, given that you’ve got hours worked outpace fallen employment.
“(The Bank of Canada has) already deployed all their large asset purchase programs they had in the toolkit, and there’s no real point to guidance if no one’s pricing in a hike for well over a year … If it turns out that the peak shock from social distancing measures was on the lower side of estimates, it doesn’t imply less of a gap in the economy if you will, and it perhaps implies a little bit earlier of a return to normal. But that’s not a 2020 discussion, it’s probably not a 2021 discussion either. So I don’t think it changes anything (for the Bank of Canada) short term.”
(Reporting by Fergal Smith, Moira Warburton and Jeff Lewis; Editing by Steve Scherer)