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July Labour Force Survey: Reopening Didn’t Pack the Same Punch

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Pandemic-exposed sectors still have a long way to go.

The job market took an underwhelming step forward in July, as Canada continued to reopen. Employment growth was much slower compared to June, although the details beneath the headline were more positive, with gains led by full-time jobs. While growth was still strong by pre-pandemic standards, the overall employment rate is now just getting back to where it was in March, before the third wave.

Job growth in pandemic-exposed sectors was disappointing. Accommodation and food service continued to rise, but by far less than the sector did in June, while information, culture, and recreation, as well as other services (which includes areas of personal care), were essentially flat. Meanwhile, both manufacturing, and especially construction, still remain below their pre-pandemic levels. This stands in stark contrast to white-collar services and the public sector, where employment is doing well. 

A key question going forward is what ‘quick wins’ are left for the labour market as the economy shifts away from the wild swings brought on by shutdowns and reopenings. Ontario, for instance, only entered “stage 3” of its reopening plan towards the end of the July survey reference week, which could mean further progress in industries like food services. In general, the Canadian labour market has made substantial strides over the past year, but the rebound remains incomplete. Strong employer demand should help keep things moving in the right direction, provided the public health situation doesn’t deteriorate. Nonetheless, as the recovery enters a new phase, maintaining strong gains could prove more challenging.