(Bloomberg) — Canada’s labor market probably recorded a fifth-straight month of strong job gains in September with schools and childcare centers reopening, but a second wave of Covid-19 cases is dashing any hopes for a quick recovery.

The country’s economy likely added about 153,000 jobs in September, according to the median of 10 estimates in a Bloomberg survey of economists. That would bring bring the number of jobs recovered since the height of the pandemic to just over 2 million, or about two-thirds of the 3 million lost jobs in March and April.

But the gains are fading. New employment last month is expected to be down from the 245,800 jobs added in August, and the 418,500 new positions in July.

chart: Slowing Gains

© Bloomberg
Slowing Gains

While demand in some industries like technology may drive near-term hiring, there is continued weakness in travel and food services industries. And with new cases rising across the country, provincial leaders are imposing further restrictions on the economy, which could prompt a setback for recovery.


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“Rising virus counts could lead the economy to make a U-turn and shed jobs again as the year winds down,” said Royce Mendes, an economist at Canadian Imperial Bank of Commerce, by email.

Still, Canada’s unemployment rate may have dropped below 10% for the first time since the pandemic struck, economists predict. That’s partly because more young people are back at school, and out of the labor force, according to Royal Bank of Canada economist Nathan Janzen, who is forecasting 200,000 new jobs in September. Youth were among those most affected by the pandemic, given they disproportionately work in low-pay service jobs hardest by the business closures.

Forecasts in the survey ranged from a low of 100,000 jobs to 200,000.

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