Canada’s economy recorded a third straight month of strong employment gains that have recouped more than half of losses from COVID-19.

Employment rose by 418,500 in July, bringing to 1.7 million the number of jobs reclaimed over the past three months. Canada lost 3 million jobs in March and April at the height of the pandemic. The employment rebound in Canada has outpaced the U.S., which has recovered 42 percent of its payroll losses.

The employment gains were largely expected as provinces, particularly Ontario, moved to more aggressively reopen their economies, prompting businesses to rehire workers. Economists, however, warn it could still take years before the labor market returns to pre-pandemic levels. A new concern in the July report was that that the bulk of the job gains were part-time.

“The numbers may speak to diminishing returns in reopening,” said Brett House, deputy chief economist at Bank of Nova Scotia. “The relatively easy early gains have been made and adding additional jobs could be harder.”

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People wear face masks as they commute by metro in Montreal on Sunday. Graham Hughes/The Canadian Press via AP

The hiring lowered the nation’s unemployment rate to 10.9 percent, from 12.3 percent previously.

Full-time positions rose by 73,200 in July, versus a 343,500 increase in part-time employment. Economists predicted a July increase of 380,000 jobs and an unemployment rate of 11 percent, according to the median forecast in a Bloomberg survey.

Hours worked gained for a third straight month, rising 5.3 percent from June. Still, the number of hours worked in July was still 88 percent of pre-pandemic levels in February.

Payrolls in the U.S. increased by 1.76 million in July, according to data Friday from the Labor Department, also beating expectations. The employment rebound in the U.S. has been slower than in Canada, recouping 44 percent of losses in March and April.

While the rebound from the deep downturn has been strong, there are worries the jump in activity and spending will peter out. Economists aren’t predicting a full recovery of the labor market for at least another two years. Still, Friday’s numbers suggest the rebound remains at least somewhat resilient.

The number of employed Canadians who worked less than half their usual hours because of the pandemic dropped by 412,000 in July, bringing COVID-related absences to just under 1 million, the statistics agency said. That number was at 2.5 million in April.

Employment increased in most provinces, led by a 151,000 gain in Ontario. Hiring was strong among services-related industries that have been hit hardest by the lockdowns, such as retail and restaurants.

Statistics Canada also released for the first time a breakdown of its data by race, which showed visible minorities have been hurt disproportionately by the crisis.


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