OTTAWA — Canada lost a record-breaking 1 million jobs in March while the unemployment rate soared to 7.8 per cent, official data showed on Thursday, as the new coronavirus outbreak forced the closure of non-essential businesses.
Statistics Canada said the data did not fully capture the extent of the job losses since the agency polled respondents before the crisis began to take its full toll. Analysts in a Reuters poll had forecast a loss of 350,000 jobs and an unemployment rate of 7.2 per cent, up from the 5.6 per cent seen in February.
“Sticker shock for sure. This was about as bad as it could be given the weekly (unemployment) claims that have been divulged,” said Derek Holt, vice president of capital markets economics at Scotiabank.
More than 5 million Canadians had applied for all forms of federal emergency unemployment help since March 15, government data showed on Thursday, suggesting the real jobless rate is closer to 25 per cent.
The Canadian dollar initially fell to 71.07 U.S. cents, after the jobs plunge, but recovered some ground to touch 71.33 U.S. cents.
The job loss was the largest drop in a single month going all the way back to January 1976, when Statscan adopted the current model for gauging the health of the labor force. The previous record was the 125,000 jobs lost in January 2009.
The highest unemployment rate in the same data period was the 13.1 per cent seen in December 1982.
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The Bank of Canada slashed its overnight interest rate three times in March to 0.25 per cent and launched what analysts called its first quantitative easing program as it tries to shield the economy from the impact of the coronavirus outbreak and low oil prices. The central bank’s next interest rate decision is set for April 15.
“Interest rates will be at these levels for more than a year. The Bank of Canada will continue with the quantitative easing program until the recovery is well under way,” said Andrew Kelvin, chief Canada strategist at TD Securities.
© Thomson Reuters 2020