State of the Labour Market

April Labour Force Survey Preview: Bracing For Impact

April data will give a more complete picture of COVID-19’s labour market damage.

The unprecedented one million-plus employment drop recorded in the March Labour Force Survey (LFS) actually understated the initial carnage wrought by COVID-19 on the Canadian labour market. The LFS doesn’t just ask Canadians if they had a job during the survey reference week, but also for those who were employed, how many hours they worked. At a time of temporary business closures of uncertain length, the employment status of many Canadians is somewhat ambiguous. In this context, tracking changes in other indicators, like hours worked, helps give a more comprehensive assessment of COVID-19’s labour market impacts.  

While employment fell 5.3% from February to March, the total number of hours spent at workers’ main jobs plunged even more, by a whopping 15.1%. This drop partly reflected falling employment, but even more so, plunging hours worked among those still considered employed, particularly from a jump in workers who didn’t work any hours during the week.

One way to put this drop into context is by comparing the number of hours worked to the size of the Canadian population. Overall, the number of weekly hours worked across all jobs fell by 3.44 hours per Canadian adult, compared to a year earlier. The decline was larger among women, who lost 3.6 hours per person from an already lower starting-point than men, who lost 3.3 hours per person. At just 16.5 weekly hours per person, per capita hours worked in March was at its lowest level recorded by the modern LFS since 1976. 

Economic conditions have evolved quickly since the March 15th to 21st reference week for last month’s data. Other areas of the economy have shut down, and job postings on Indeed Canada have fallen further compared to last year’s trend. Most tellingly, as of a day after the April 12-18 reference week for the upcoming job numbers, 6.7 million Canadians — representing roughly a third of the February labour force — had applied for emergency government benefits

As was the case last month, capturing COVID-19’s ongoing labour market damage will require going beyond headline changes in employment, to incorporate metrics like absences from work, and per-capita weekly hours. While the March numbers were an early snapshot of its impact, the upcoming data for April will help complete the troubling picture. 

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