Jobs picture turns negative and there’s more bad news to come, economists warn
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A weaker labour market could factor into other economic statistics as well. The latest jobs report “offers the first concrete piece of evidence that the Canadian economy likely contracted in December,” said Nikita Perevalov, director of economic forecasting at Bank of Nova Scotia, in a report on Friday.
And COVID-19’s drag on the economy is poised to have longer-lasting effects.
The workforce participation rate dipped in December by 0.2 percentage points, to 64.9 per cent. The drop in labour force participation rates was “mostly comprised of male youth and working women, likely frustrated by the job search and staying home to take care of suddenly homebound children, respectively,” according to Leah Nord, the Canadian Chamber of Commerce’s senior director of workforce strategies and inclusive growth.
“The enduring impacts of the increasingly long-term unemployed and workforce drop-outs will cast a long shadow upon the recovery, as re-entry into what will assuredly be a very different labour market presents significant obstacles,” Nord added in a statement.
A recent report from Royal Bank of Canada’s economics unit found that, between February and October, 20,600 women “fell out” of the country’s workforce. Meanwhile, moves like Ontario’s recent extension of online learning for elementary school students will weigh on working parents.
“This trend of increasing employment that we saw through till November, we wouldn’t expect it to return anytime soon,” Nord said in an interview.