Labour market recovery from COVID‑19

Overview

  • This page presents indicators that track the recovery of the labour market from COVID-19.
  • COVID-19 has emphasized the complexity and diversity of the labour market – and the need to look at a broad range of measures to assess labour market health.
  • One way to do this is to examine indicators along three different dimensions, with each capturing a different type of slack: overall conditions, job characteristics and inclusiveness.12
  • The indicators below follow this approach and will be updated as the labour market recovery from the pandemic proceeds.3
  • The recovery of each indicator is depicted as progress bars, where the current value of a measure is compared with its crisis trough and a benchmark value (2019 monthly average). Halfway progress implies that the measure has recovered half of the trough-benchmark distance.4

Chart 1: Overall labour market conditions

Chart 1: Overall labour market conditions

Note: Market tightness is computed as the ratio of monthly averaged total job postings supplied by Indeed.com to total unemployed. Market tightness, JVWS quarterly vacancies and total hours worked are expressed as a ratio of their 2019 average. Missing JVWS data for 2020Q2 and 2020Q3 are imputed from growth rates of quarterly averages of Indeed.com total daily job posting data. Data for all series are from Statistics Canada’s Labour Force Survey (LFS) unless otherwise noted. BOS is Business Outlook Survey; JVWS is Statistics Canada’s Job Vacancy and Wage Survey.
Sources: Statistics Canada, Bank of Canada and Bank of Canada calculations

Chart 2: Job characteristics

Chart 2: Job characteristics

Note: Average hours worked are expressed in hours and not percent. Unit labour cost is measured as labour income divided by GDP at market prices. LFS is Statistics Canada’s Labour Force Survey; SEPH is Statistics Canada’s Survey of Employment, Payrolls and Hours.
Sources: Statistics Canada, Bank of Canada and Bank of Canada calculations

Chart 3: Inclusiveness of the labour market

a. Unemployment rate

Chart 3: Inclusiveness of the labour market

a. Unemployment rate

Sources: Statistics Canada, Bank of Canada and Bank of Canada calculations

b. Labour force participation rate

b. Labour force participation rate

Sources: Statistics Canada, Bank of Canada and Bank of Canada calculations

c. Sectoral mix of jobs

c. Sectoral mix of jobs

Sources: Statistics Canada, Bank of Canada and Bank of Canada calculations

Endnotes

  1. 1. This approach follows that of E. Ens, L Savoie-Chabot, K. G. See and S. L. Wee, “Assessing Labour Market Slack for Monetary Policy,” Bank of Canada Staff Discussion Paper No. 2021-15 (October 2021).[]
  2. 2. See Ens et al for a full detailed description of each indicator and its construction. For this webpage, unit labour cost is calculated as labour income divided by GDP at market prices.[]
  3. 3. Note that a recovery of the labour market to pre-pandemic levels is not the same as the concept of maximum sustainable employment. See page 19 of Ens et al for more details.[]
  4. 4. Measures which have fully recovered and which exceed their 2019 levels have their percentage recovery capped at 120%.[]