The Bank of Canada building is seen in Ottawa, Wednesday, April 15, 2020. THE CANADIAN PRESS/Adrian Wyld

The Bank of Canada building is seen in Ottawa, Wednesday, April 15, 2020. THE CANADIAN PRESS/Adrian Wyld

Pandemic job concerns could pose problem in long-term, Bank of Canada says

Lockdowns in the spring of 2020 led to a historic drop in employment with about three million jobs lost

Consumers’ concerns about finding work during the pandemic could signal longer-term problems for the country’s labour market, the Bank of Canada says.

The central bank’s quarterly survey on consumer expectations showed that respondents believed they were less likely to find a new job if they lost their current one.

Although respondents were less concerned about losing their current jobs, they were also less likely to leave their job voluntarily, suggesting that Canadians remain concerned about the health of the job market.

Bank of Canada officials wrote that people appear unwilling to change jobs until the situation normalizes. That means less “moving up” between jobs that the bank warned could weigh on future wage growth and lead to lower productivity that would impact the economy overall.

The survey of consumer expectations was conducted during November just as COVID-19 case counts started to rise nationally, but before lockdowns in some provinces.

Lockdowns in the spring of 2020 led to a historic drop in employment with about three million jobs lost. Asked whether new restrictions would be better or worse economically, three-quarters of respondents in the survey said they expected lockdowns now to have a similar or slightly smaller impact on their hours worked, earnings and spending.

“Most respondents do not expect the threat from COVID‑19 to diminish before the second half of 2021,” the report said.

“Expectations among many for a slow return to normal — or even no return to normal for some — suggest the possibility of a lasting impact from the crisis.”

Heading into the end of 2020, the outlook overall seemed to be more positive than it was a few months earlier. Despite rising case counts, there was also positive news about vaccines.

The bank’s quarterly business outlook survey also released Monday suggested business sentiment improved in line with news about vaccines, with more companies saying they planned to hire and invest than in the fall of 2020.

However, the bank said most businesses don’t expect the positive impacts of vaccinations to materialize until later this year.

Nor are the impacts going to be widespread. The business outlook survey noted that one-third of companies polled didn’t expect their sales to return to pre-pandemic levels in the next 12 months.

“Despite the upbeat headline figures, the underlying story is mixed with services sectors continuing to struggle amid ongoing restrictions,” wrote BMO’s Benjamin Reitzes in an analysis.

“Still, with the vaccine being distributed the outlook is brighter than it was a quarter ago.”

Also contributing to the positive outlook for businesses was ongoing government aid programs.

Households expected interest rates to stay lower than their pre-pandemic levels for the next two years. The report noted that views about access to consumer credit deteriorated from the previous quarter “to their lowest level so far, indicating tighter credit conditions since the onset of the pandemic.”

The central bank’s next scheduled rate announcement is on Jan. 20, when the Bank of Canada will also release its updated economic and inflation outlook.

Bank of Canada governor Tiff Macklem has said repeatedly the bank’s key policy rate will remain at 0.25 per cent, which is as low as the bank has said it is willing to go, until an economic recovery is well underway.

CIBC senior economist Royce Mendes wrote that the results in the two surveys don’t point to any need by the Bank of Canada to take immediate monetary action.

“While both surveys were taken well-before the latest spike in virus cases and the associated necessary shutdowns, they suggest that businesses and households saw light at the end of the tunnel,” Mendes wrote.

“The erosion of longer-term inflation expectations in the consumer survey might provide central bankers with a bit more cause for concern.”

Jordan Press, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Horse riders are struggling to find parking for their vehicles and trailers in Golden Ears Provincial Park. (Crystal Ireland/Special to The News)
Petition for equestrian parking spaces in Maple Ridge park gets huge response

Horse riders say their parking lots have been overtaken by cars in Golden Ears Provincial Park

The Art Infiniti Hotel caught fire on New Year’s Eve (Dec. 31, 2020) in Maple Ridge. Seven people were evacuated safely. (Barry Brinkman/Special to The News)
LETTER: Headline about Maple Ridge fire victim insensitive

Senior lost everything in Dec. 31 fire and letter writer felt denture reference inappropriate

Maple Ridge released its winter program guide recently. (Special to The News)
City unveils numerous winter programs and activities

Maple Ridge unveils guide that takes into consideration COVID-19

Corina Ardelean, right, and a volunteer wait for clients at Christian Life Assembly in Maple Ridge. (Special to The News)
Romanian refugees fulfill mission in Maple Ridge

Helping struggling families put food on the table

Maple Ridge’s Bruce Coughlan. (Special to The News)
Robbie Burns day to be feted virtually by Maple Ridge musician

Bruce Coughlan will hold virtual concert in Campbell River theatre in honour of Scottish bard

A scene from “Canada and the Gulf War: In their own words,” a video by The Memory Project, a program of Historica Canada, is shown in this undated illustration. THE CANADIAN PRESS/HO - Historica Canada
New video marks Canada’s contributions to first Gulf War on 30th anniversary

Veterans Affairs Canada says around 4,500 Canadian military personnel served during the war

Williams Lake physician Dr. Ivan Scrooby and medical graduate student Vionarica Gusti hold up the COSMIC Bubble Helmet. Both are part of the non-profit organization COSMIC Medical which has come together to develop devices for treating patients with COVID-19. (Monica Lamb-Yorski photo - Williams Lake Tribune)
Group of B.C. doctors, engineers developing ‘bubble helmet’ for COVID-19 patients

The helmet could support several patients at once, says the group

A 17-year-old snowmobiler used his backcountry survival sense in preparation to spend the night on the mountain near 100 Mile House Saturday, Jan. 16, 2021 after getting lost. (South Cariboo Search and Rescue Facebook photo)
Teen praised for backcountry survival skills after getting lost in B.C.’s Cariboo mountains

“This young man did everything right after things went wrong.”

Conservative Leader Erin O’Toole holds a press conference on Parliament Hill, in Ottawa on December 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No place for ‘far right’ in Conservative Party, Erin O’Toole says

O’Toole condemned the Capitol attack as ‘horrifying’ and sought to distance himself and the Tories from Trumpism

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A passer by walks in High Park, in Toronto, Thursday, Jan. 14, 2021. This workweek will kick off with what’s fabled to be the most depressing day of the year, during one of the darkest eras in recent history. THE CANADIAN PRESS/Chris Young
‘Blue Monday’ getting you down? Exercise may be the cure, say experts

Many jurisdictions are tightening restrictions to curb soaring COVID-19 case counts

Pindie Dhaliwal, one of the organizers for the Surrey Challo protest for Indian farmers. She says organizers were told by Surrey RCMP that the event was not allowed due to COVID-19. Organizers ended up moving the protest to Strawberry Hill at the last minute. (Photo: Lauren Collins)
Indian farmers rally moves as organizers say Surrey RCMP told them they couldn’t gather

Protest originally planned in Cloverdale, moved to Strawberry Hill

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
COVID-19: Provinces work on revised plans as Pfizer-BioNTech shipments to slow down

Anita Anand said she understands and shares Canadians’ concerns about the drug company’s decision

Tourists take photographs outside the British Columbia Legislature in Victoria, B.C., on Friday August 26, 2011. A coalition of British Columbia tourism industry groups is urging the provincial government to not pursue plans to ban domestic travel to fight the spread of COVID-19. THE CANADIAN PRESS/Darryl Dyck
B.C. travel ban will harm struggling tourism sector, says industry coalition

B.C. government would have to show evidence a travel ban is necessary

Most Read