The Canadian dollar is mixed on Friday as the federal government released the worst jobs report in the nationâs history. Due to the coronavirus pandemic shutting down the country from coast to coast, the economy shed more than one million jobs, significantly raising the unemployment rate in March. And this is just the beginning, experts warn.
According to Statistics Canada, the economy lost 1.011 million jobs last month, higher than the market forecast of 350,000. Full-time jobs declined 474,000 jobs and part-time positions plunged 536,700. To highlight just how much Canada has been affected by the coronavirus, the labor market added 30,300 jobs in February.
Most of the losses were felt in the private sector and greatly affected employees between the age of 15 and 24. Employment declined across all provinces, led by Ontario (-403,000), Quebec (-264,000), British Columbia (-132,000), and Alberta (-117,000).
The unemployment rate surged from 5.6% in February to 7.8% in March. The median estimate was 7.2%. This is the worst one-month change in more than 40 years. The labor force participation rate fell to 63.5%, down from 65.5% in the previous month. Average hourly wages year-over-year rose 6.1% last month.
The statistics agency has temporarily modified the way it measures unemployment to better understand COVID-19âs impact on the labor market. Analysts are warning that the data will be worse when the government begins collecting April job numbers.
Ottawa launched its Canada Emergency Response Benefit (CERB) program on Monday, giving unemployed Canadians $500 per week for up to 16 weeks. On the first day, the government received 966,000 applications. Prime Minister Justin Trudeau confirmed that CERB would soon include students, contractors, gig economy workers, and others. This is in addition to the enhanced benefits at the federal and provincial levels.
For anyone hoping life will return to normal soon, the prime minister said at his daily press briefings that it could still take “months.”
At some point, in a few months, probably, when we are easing some of the measures, we will have to be continue to be very vigilant about our own behavior in returning to work to ensure we wonât be facing a new epidemic or even worse.
Itâs going to be very, very important to do it in a measured, graduated way that allows for economic activity to begin while preventing severe spikes in COVID transmission.
Canada has been hard hit by the coronavirus, reporting about 20,000 confirmed cases and just under 500 deaths. Quebec and Ontario represent most of the cases, with 8,580 and 4,347, respectively.
The loonieâs freefall has been capped due to rising energy prices. With the Organization of the Petroleum Exporting Countries (OPEC) set to slash production levels by as much as 10 million barrels per day (bpd), crude prices have been rebounding from 20-year lows. Since oil remains Canadaâs largest export, any change can impact the loonie. May West Texas Intermediate (WTI) crude oil futures surged $1.27, or 5.06%, to $26.35 a barrel on the New York Mercantile Exchange.
The USD/CAD currency pair tumbled 0.26% to 1.3974, from an opening of 1.4013, at 13:20 GMT on Thursday. The EUR/CAD rose 0.32% to 1.5257, from an opening of 1.5211.
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