CANADA ECONOMICS: CIBC on Higher-Than-Expected Job Losses in January; International Merchandise Trade in December
08:52 AM EST, 02/05/2021 (MT Newswires) -- CIBS said that as new COVID-19 cases were peaking in January, the pace of job loss in Canada accelerated.
Employment declined 213,000, far exceeding the drop of 40,000 the consensus had penciled in, noted the bank. As a result, the unemployment rate rose to 9.4% from 8.8% in December, a level not seen since last summer.
Ontario and Quebec, provinces that tightened restrictions the most following the December survey, saw the greatest declines, with industries directly affected by the shutdowns (accommodation & food services, retail trade, and information, culture & recreation) seeing the most pronounced job losses.
In the grand scheme of things, the second COVID-19 wave was still less destructive in terms of total economic damage than the first, added CIBC. Last March and April the labor market shed 3 million jobs.
After recovering 2.4 million jobs between May and November, employment had only declined a combined 265,000 in December and January. While it was never good news when Canadians were losing jobs, governments, businesses and individuals had all adapted to make the second wave less burdensome on the economy, and what pain was felt was relatively narrowly focused in industries directly affected by the virus and associated necessary shutdowns, pointed out the bank.
While there was scope for some weakness to persist, daily new COVID-19 cases had already fallen to levels low enough that officials were in the process of carefully easing restrictions, according to CIBC
Separately, Friday data on Canada's international merchandise trade balance showed a significant narrowing in the deficit in December to $1.7 billion from $3.6 billion in November. The lighter shortfall came on the back of rising energy exports and falling consumer goods imports, added CIBC.