Ottawa-Gatineau unemployment rate jumps to 9.5%

Ottawa
Photo by Pascal Bernardon on Unsplash.

The initial wave of businesses reopening last month failed to stop the National Capital Region’s unemployment rate from reaching its highest level in more than a decade, Statistics Canada reported Friday.

The federal agency said the jobless rate reached 9.5 per cent in June, up from 8.4 per cent in May, as the number of residents employed locally fell to its lowest level since 2013.

Statistics Canada uses a three-month rolling average to calculate the region’s unemployment rate, meaning the latest figures reflect the period in April, May and June in which many businesses were shuttered and local residents were asked to stay home to reduce the spread of COVID-19.

Looking exclusively at June’s employment numbers, however, shows some encouraging signs.

The local retail and hospitality sectors have been among the hardest hit by the pandemic and shed thousands of jobs in April and May. In June, however, employment levels in those sectors were largely flat – a possible first sign that job losses in these sectors has bottomed out.

Elsewhere, the region’s closely watched tech sector added 1,100 jobs, while federal employment held steady.

Nationally, Statistics Canada says the economy added nearly one million jobs in June as businesses forced closed by the pandemic began to reopen.

The agency says 953,000 jobs were added last month, including 488,000 full-time and 465,000 part-time positions.

The unemployment rate fell to 12.3 per cent in June after hitting a record-high of 13.7 per cent in May.

As in May, even though more people found jobs, more people were also looking for work.

The average economist estimate for June had been for an addition of 700,000 jobs and the unemployment rate to fall to 12.0 per cent, according to financial data firm Refinitiv.

Statistics Canada says the unemployment rate would have been 16.3 per cent had it included in unemployment counts those who wanted to work, but did not look for a job.

The jobs report this morning says there are still some 3.1 million people affected by the shutdowns of March and April when public health restrictions forced businesses to close and workers to stay at home to slow the spread of COVID-19.

About 2.5 million didn't have jobs in June, either due to temporary or permanent layoffs, while the remainder are working less than half their usual hours.

As restrictions eased, the number of people participating in the labour force grew by about 786,000 after May's 491,000 gain, bringing those considered in the labour force to within 443,000 of its pre-pandemic level.

The gains, though, have not been shared equally between men and women, with the former gaining back jobs at a faster pace than the latter.

The unemployment rate for women was 12.7 per cent in June compared to 12.1 per cent for men. Similarly, the participation rate for core-aged men was less than one percentage point below the February level, while for women it was 1.4 percentage points short.

The underutilization rate – which counts those who are unemployed, those who want a job but didn't look for one, and those working less than half their usual hours – was 28.3 for women and 25.5 per cent for men.

The Bank of Canada and federal government say the worst of the economic pain from the pandemic is behind the country, but Canada will face high unemployment and low growth until 2021.

The economic outlook released by the Liberal government Wednesday forecast the unemployment rate to be 9.8 per cent for the calendar year, dropping to 7.8 per cent next year based on forecasts by 13 private sector economists.

– With reporting by the Canadian Press