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Data released on Thursday, showed that employment in Canada plunged 1.01 million in March. Analysts at RBC Capital Markets forecast the unemployment rate will average 14% during the second quarter. 

Key Quotes: 

“The 1 million drop in jobs in March reported this morning makes every other month-over-month change in the labour force survey data before look like a rounding error. The largest prior one-month declining dating back to 1976 was a 125 thousand decline. The job losses in one month were more than twice the total job losses in the 2008/09 global financial crisis. But the April decline could already be multiples of this March drop, given another almost 3 million people have reportedly applied for employment-loss benefits since the mid-March labour force survey reference period.”

Our latest forecasts assume that the unemployment rate will average 14 ½% in the second quarter, double March’s 7.8% rate. That might be too high given the smaller-than-assumed increase in March, but only if a large share of layoffs continue to be non-temporary, and if workers drop out of the labour market rather than being technically counted as unemployed. The key to gauging the pace at which the economy can bounce back from the current downturn still depends on the extent to which employer-employee relationships can be maintained, and households and businesses can bridge the gap until current social distancing policies can be eased.”

“An unprecedented labour market shock is also being met by an unprecedented increase in government support for households and businesses – both in Canada and abroad. (…) These programs could distort some labour market statistics in the near-term, but provide important offsets to households to get through a period of unprecedented economic weakness.”