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

Kimberly Proctor, 18, was murdered in 2010. Her family has spent many of the years since pushing for a law in her honour, that they say would help to prevent similar tragedies. (Courtesy of Jo-Anne Landolt)
Proposed law honouring murdered Langford teen at a standstill, lacks government support

Ministry of Mental Health and Addictions has concerns with involuntary detainment portion of act

The speculation and vacancy tax raised about $1.21 million in Sidney and North Saanich combined. (Black Press Media file photo).
North Saanich and Sidney property owners paid $1.21 million in speculation and vacancy tax

Speculation and vacancy tax raised 6.5 million in Greater Victoria

Saanich parks staff will be applying a herbicide called Garlon XRT in Sayward Hill Park between Jan. 18 to 29 to control the invasive species English holly and hawthorn. (Devon Bidal/News Staff)
Herbicide used to target ‘priority’ invasive species in Saanich park

Treatment applied to English holly, hawthorn stumps, in Sayward Hill Park

BC Coroners Service is currently investigating a death at Canoe Cove Marina and Boatyard in North Saanich. (Black Press Media File)
Drowning death in North Saanich likely first in B.C. for 2021

Investigation into suspected drowning Monday night continues

Located at 9750 West Saanich Rd., this North Saanich mansion is on the market for $10.25 million. (Realtor.ca photo)
Located at 9750 West Saanich Rd., this North Saanich mansion is on the market for $8.65 million. (Realtor.ca photo)
The five most expensive homes for sale in Greater Victoria

A roundup of luxury estates currently on the market

Thursday, Jan. 28, 2021 is International Lego Day. (Jenna Hauck/ Chilliwack Progress)
Unofficial holidays: Here’s what people are celebrating for the week of Jan. 24 to 30

Lego Day, Talk Like a Grizzled Prospector Day and Puzzle Day are all coming up this week

Terry Keogh, an RDN Transit driver, used his paramedic skills the morning of Jan. 22 after coming across an unconscious woman along his route in downtown Nanaimo. (RDN Transit photo)
Nanaimo transit driver stops his bus and helps get overdosing woman breathing again

Former EMT from Ireland performed CPR on a woman in downtown Nanaimo on Friday

Chief Public Health Officer Theresa Tam speaks during a daily briefing in Ottawa. (THE CANADIAN PRESS/Adrian Wyld)
31 cases of COVID-19 variants detected in Canada: Health officials

Dr. Theresa Tam made announces 13 more variant COVID-19 cases in Canada

Daily COVID-19 cases reported to each B.C. health region, to Jan. 20, 2021. Island Health in blue, Northern Health green, Interior Health orange, Vancouver Coastal in red and Fraser Health in purple. (B.C. Centre for Disease Control)
B.C.’s COVID-19 infection rate stays stable with 508 cases Friday

Vaccine delivered to more than 110,000 high-risk people

Black Press file photo
Investigation at remote burned-out Vancouver Island cabin reveals human remains

Identity of victim not released, believed to be the owner of an SUV vehicle found parked nearby

Angela Waldick is the new team photographer for the Nanaimo NightOwls. (Nanaimo NightOwls photo)
Half-blind photographer will help new Island baseball team look picture-perfect

Nanaimo NightOwls say legally blind team photographer is making history

School District 57 headquarters in Prince George. (Mark Nielsen, Local Journalism Initiative Reporter)
Prince George school district settles with sexual abuse victim

Terms were part of an out-of-court settlement reached with Michael Bruneau, nearly four years after he filed a lawsuit

Surrey provincial court. (File photo: Tom Zytaruk)
New COVID-19 protocols set for provincial courthouses

The new rules were issued on Jan. 21, and took effect immediately

Dog owners, from left, Marlyn Briggs with Nayla, Marjory Sutherland with Effie and Mick, and Christina Godbolt with Conon walk their pets frequently at the Chemainus Ball Park but are growing increasingly concerned about drugs being found discarded in the area. (Photo by Don Bodger)
Puppy rushed to emergency 3 times after ingesting drugs in Chemainus public spaces

Dog owners walking in Chemainus parks urged to take caution

Most Read