Canada and the U.S. continue to report devastating unemployment figures as the coronavirus (COVID-19) continues to hobble the North American and global economies. And more pain is expected. Coronavirus numbers continue to climb at a time when the U.S. and Canada are preparing to open up their economies.
What Is the U.S. Unemployment Rate?
The U.S. unemployment rate surged 235% month-over-month in April to 14.7% from 4.4% in March. During the month, the U.S. economy lost 20.5 million jobs, as tens of thousands of U.S. businesses shuttered their doors in April and laid off or furloughed workers.
To put that number into perspective, the previous one-month record for job losses was two million in September 1945. In April alone, the U.S. lost more jobs than during the entire Great Recession, when 8.7 million jobs evaporates. In just one month, the U.S. has wiped out an entire decade of job gains.
Oddly enough, April hourly wages were up 4.7% month-over-month. That’s dwarfs the 0.3% monthly increase that has been logged over the last year. Paychecks were up almost 8%—more than double the average 3.5% annual increase over the last year. Why? So many lower-paying jobs were lost, and many high-paying earners kept their jobs, skewing the wage data.
The future remains even bleaker. According to one recent study, more than half of U.S. small businesses could end up closing their doors for good because of the coronavirus. The study found that roughly 14 million businesses could end up closing, with millions more losing their jobs.
An eyewatering 52% of those small business owners surveyed said they expect to close their doors over the next six months. Like in Canada, small businesses are the backbone of the U.S. economy, accounting for a whopping 99% of all U.S. businesses.
What Is the Canadian Unemployment Rate?
The coronavirus is pounding the Canadian economy too. In April, the Canadian economy shed nearly two million jobs with the unemployment rate jumping to 13%. The worst single month ever.
The previous record for job losses was 1.01 million in March, which saw the Canadian unemployment climb to 7.8%. Over the last two months, the Canadian economy has lost three million jobs, the steepest monthly job losses ever recorded.
On one hand, we have to go back to the Great Depression to see those kinds of figures. On the other, the speed at which we have hit these numbers is unprecedented.
The April data is actually a lot worse than it appears. According to Statistics Canada, the April unemployment rate would have been 17.8% if the data had been adjusted to reflect those not counted as unemployed for reasons related to COVID-19.
Canadians who were furloughed as a result of COVID-19 were simply counted as not being in the labour force. It’s fair to say some of those temporarily laid off as a result of COVID-19 will see their unemployment situation become permanent.
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Canada and the U.S. are reporting unprecedented job losses and unemployment figures. And those numbers are expected to climb higher. Coronavirus deaths continue to climb and both counties are in the process of opening their economies. The Canadian and U.S. economies have been devastated by the coronavirus, but a second wave of illnesses could overwhelm the North American economy.
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