Canadian Employment (September 2021)

Sri Thanabalasingam, Senior Economist | 416-413-3117

Date Published: October 8, 2021

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Employment returns to pre-pandemic level in September

  • The Canadian labour market added 157k positions in September, well above the consensus median call for a gain of 60k jobs. This brough employment back to its pre-pandemic (February 2020) level. Gains were concentrated in full-time (+194k) employment, while part-time (-37k) employment fell last month. 
  • The labour force also expanded in September, increasing by 139k. As employment gains were stronger, the unemployment rate dropped 0.2 percentage points to 6.9% in September. 
  • By industry, the services sector (+142k) accounted for most the job growth last month. The increase was driven by public administration (+37k), information, culture and recreation (+33k), and professional, scientific and technical services (+30k). Notably, employment in accommodation and food services dropped -27k, the first decline in five months.  
  • On the goods side, employment rose by 15k positions on the back of a 22k gain in the manufacturing industry, which was its largest gain since December 2020. Employment in construction (-11k) and agriculture (-4k) fell last month.
  • By province, employment picked up in Ontario (+74k), Quebec (+31k), Alberta (+20k), Manitoba (+8k), New Brunswick (+6k) and Saskatchewan (+5k). It was little changed elsewhere. 
  • Lastly, total hours worked picked up 1.1%, but were still 1.5% below pre-pandemic level.       

Key Implications

  • This was a solid report. Canada's labour market is now back at pre-pandemic levels, handily beating market expectations. Employment gains were broad-based with 10 of 16 industries seeing advances in September. In addition, participation in the labour market also reached the February 2020 rate for the first time since the pandemic struck last month.
  • Interestingly, despite the healthy gain in employment last month, unemployment only fell by 20k, and long-term unemployed workers — those who have been without work for 27 weeks or longer — was little changed. This could be reflecting the difficulties faced by long-term unemployed Canadians in finding new jobs, perhaps due to a deterioration of skillsets. 
  • That said, ongoing income support programs, such as the Canada Recovery Benefit, may also be a contributing factor. This program, among others, is expiring at the end of the month, which could lead to more people rejoining the workforce in October, that is, unless it is extended.