National unemployment rate hits new record even as economy adds jobs

Daniel Fowler
June 5, 2020

Canadian employment rose by 2,90,000 or 1.8 percent in May, the government statistical agency said Friday, as restrictions to slow the spread of the coronavirus were eased and businesses started reopening.

The U.S. Labor Department said 1.87 million workers filed new jobless claims last week, 249,000 fewer than the week prior but still a grievous figure almost three times higher than the weekly record in the pre-pandemic economy.

And the number of workers on temporary layoff declined by 2.7 million to 15.3 million, in a sign people have been able to return to their jobs.

Statistics Canada said the number of people who worked less than half their usual hours fell by 292,000 in May.

In doing so, Trump broke a federal rule prohibiting the executive branch from commenting on the jobs report within an hour of its release, instead tweeting within minutes of its release, at 8:33am ET, in order to take credit.

The agency said Canada's economy added 290,000 jobs in May, replacing about 10 per cent of the jobs it lost to COVID-19. But unemployment remains extremely high compared to 2019 levels. But economists say the pace of hiring will then likely lag as a severe recession and high unemployment hold back consumer spending, the main driver of the economy.

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The report attributed the improvements to "a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it".

Overhanging the jobs picture is widespread uncertainty about how long the unemployed will remain out of work.

April's unemployment rate had hit 14.7 percent.

Statistics Canada said lower-wage workers recovered just over one-tenth of the losses they experienced in March and April.

Even if just one-third of the USA job losses turn out to be permanent, that would leave roughly 10 million people out of work.

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