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Next Thursday, the Canadian employment report for March will be released. Analysts at CIBC point out shutdowns in Canada began in earnest earlier than in the US, so job numbers will likely look worse. They expect the unemployment rate to rise from 5.6% to 6.6%. 

Key Quotes: 

“The extent of the economic damage from the sudden-stop in activity is slowly becoming apparent. Canadian employment insurance applications have reportedly surged in recent weeks, and data in the US show a labour market that was reeling even before many of the shutdowns began. Expect the Canadian numbers to look even more dire than those in the US since the survey period was a week later north of the border.”

“A plunge in employment of 250k jobs would double the drop in the worst month of the series. That would drive the unemployment rate up to 6.6% from 5.6%, even if there is a pullback in participation. 

“The bad news is that the reading for April is going to be even worse than these numbers. The good news is that a large fiscal stimulus package has been directed to support many individuals that are no longer employed. So the effect on income from every job lost can’t be directly compared to prior downturns. Still, the numbers on spending are going to be ugly simply because there are many purchases consumers can’t make in an environment of shutdowns.”