Job growth lost momentum in October amid pandemic `tug of war.'

COVID-19 `tug of war' plays havoc

Canadian employers added 84,000 jobs in October compared with 378,000 the month before, signalling the post-lockdown momentum seen in the jobs market during the summer months may be coming to an end.

Unemployment remained virtually unchanged, slipping to 8.9 per cent last month from nine per cent in September. That is the lowest it has been since the pandemic-high of 13.7 per cent in May, which captured the effects of a government-triggered recession at the beginning of spring, Statistics Canada said on Friday.

The numbers are slightly stronger than the consensus of 58,000 positions anticipated by economists on Bay Street, according to a survey by Bloomberg News. Most of the gains were in full-time employment, where 69,000 new positions were added, something viewed as a positive by economists. Overall growth, however, was unevenly distributed across provinces and industries.

Deloitte chief economist Craig Alexander described the uneven landscape of the job market as a `tug of war,' in which virus-vulnerable industries suffered significant job losses that were offset by other industries better equipped to weather surges.

For the first time since April, employment in the accommodation and food service industry fell by 48,000 jobs last month because of tightening public health measures, with 42,000 of those positions lost in Quebec. Though there was little change in employment in the information, culture and recreation industry across the country, Quebec saw a loss of 11,000 positions while Alberta dropped 7,200 jobs.

At the outset of October's labour force survey, the Quebec government placed major regions that included cities such as Montreal, Sherbrooke and Quebec City in the red zone — the most restrictive category of its tiered approach to containing the second wave of the virus. Restaurants, bars, theatres, gyms and recreation facilities all were forced to shut down.

“The types of restrictions imposed so far, concentrated on restaurants, bars and other services, will continue to dampen employment but by themselves are not enough to cause large declines,” Stephen Brown, senior Canada economist at Capital Economics, said in an email to the Financial Post.

Service-producing industries, especially wholesale and retail trade; professional, scientific and technical services; and educational services all exceeded their pre-COVID-19 levels of employment, offsetting some of the losses in the food and recreation industries. Employment increased in five provinces — Ontario, Alberta, British Columbia, Prince Edward Island and Newfoundland — while the rest of the provinces remained steady, Statistics Canada reported.

The gains over the past few months suggested the country had recouped many of the jobs lost at the outset of the pandemic. In October, Canada was 3.3 per cent below its pre-pandemic levels of employment.

Hours of work increased by 0.8 per cent, outpacing overall employment growth which went up half a per cent from September. For the first time since the economic shutdowns, the number of self-employed Canadians rose (1.2 per cent).

With the rise in COVID-19 cases across the country reaching record levels in October, more Canadians also began to work from home — approximately 150,000.