Posted on 05/11/2003 4:08:53 PM PDT by DeaconBenjamin
The economy shed 18,800 jobs in April, pushing the unemployment rate up to 7.5 per cent, Statistics Canada said Friday in a report that started to show the impact of the SARS outbreak on the labour market.
The report follows more than a year of better-than-expected job growth in this country.
Economists had expected to see a pullback in employment in the latest numbers, although most had seen at least some job growth in April.
Forecasts had called for employment to increase anywhere from 5,000 to 10,000 positions. The nation’s jobless rate was widely seen holding steady at 7.3 per cent.
The biggest decline in April was seen in Ontario, where the SARS outbreak hit the Toronto area. Employment in that province fell by 27,000 positions in April, pushing the provincial unemployment rate up 0.3 percentage points to 6.8 per cent.
“The SARS outbreak appears to have had a sizeable impact on the overall employment figures, as the largest declines were recorded in health care-social assistance and accommodation-food services, mainly in the Toronto area,” Bank of Nova Scotia senior economist Adrienne Warren said.
“If the Toronto-area decline in payrolls in these two sectors were removed from the monthly figures, national employment would have been unchanged in April.”
Friday's report left the loonie, which had pushed both higher and lower at various points in the day, trading down 0.10 of cent at 71.75 cents (U.S.) around 1 p.m. EDT.
During Statscan’s reference week for the April survey -- April 13 to April 19 -- the outbreak of severe acute respiratory syndrome in Toronto had been ongoing for a number of weeks, although the World Health Organization’s travel advisory for the city had yet to be issued.
The SARS outbreak is widely expected to put a drag on Canada’s economic growth in the second quarter. The spread of the virus was largely limited to Toronto, although that city accounts for about a fifth of the nation’s economic activity.
The Bank of Canada has said it expects the spread of the potentially fatal illness to have an impact in the second quarter of this year, although it has yet to quantify how big the hit will be.
“Although it is not possible to measure what portion of the declines in these industries was related to severe acute respiratory syndrome, some people in these industries may have been without work because of hospital ward closures, or because of slower business in the accommodation and food sector,” Statscan said in Friday’s report.
Nationally, part-time employment fell by about 29,400 jobs, partly offset by an increase of about 10,700 full-time jobs.
Employment in the accommodation and food services sector dropped by 18,400 jobs in April after a 33,000 increase in March. About 12,000 jobs in that industry were lost in Ontario in April.
The health care and social assistance segment also experienced an April decline, shedding 17,000 jobs.
The nation’s factory sector also continued to weaken, losing 7,500 jobs in April , the report said. So far this year, employment in the manufacturing sector is down 1.6 per cent or 38,000 jobs, Friday’s report said.
“The largest declines over the first four months of 2003 have been in computer and electronic products,” Statscan said.
“There have been offsetting employment gains in motor vehicle and parts manufacturing. Over the first four months of 2003, the overall manufacturing employment trend has been similar to the one in the United States, where factory payrolls have declined 1.2 per cent.”
Employment increases were seen in trade, public administration and the finance, insurance and real estate sector.
Looking ahead, TD Bank senior economist Marc Lévesque said he expects to see only modest job gains in coming months, as the SARS impact continues to make itself felt in next month's data and the Canadian economy expands at only a modest clip.
"Aside from SARS, there were other notable pockets of weakness in Torday's data," he said.
"The weak U.S. economy continued to drag down employment in Canada's heavily export-oriented manufacturing sector...Several other service-sector industries also lost jobs."
As well, he said, the weaker-than-expected April figures also suggest the Bank of Canada, which has raised interest rates twice already this year, will remain on hold "during the summer months."
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