2M jobs lost, jobless rate at 13%; 'Horrifically swift'job losses push Canada's unemployment rate to eye-watering level - ProQuest (oclc.org)

The Canadian economy lost two million jobs in April, an astonishing figure and, remarkably, one that might understate the damage caused so far by the coronavirus crisis, economists said.

Statistics Canada on Friday reported that the collapse in employment caused the jobless rate to spike to 13 per cent from 7.8 per cent in March, nearly matching the highest ever recorded in data that date to the mid-1970s. In all, about 15 per cent of the labour force is currently without work.

"Job losses have been horrifically swift since February," Arlene Kish, an economist at IHS Markit, a data and research firm, said in a note to her clients.

The unemployment rate reached 13.1 per cent in December 1982, during a previous recession. Otherwise, the Canada's jobless numbers could have been worse.

The only thing keeping the current recession from turning into a depression is the hundreds of billions of dollars the federal government and the Bank of Canada have pushed into the economy since March to cushion the fall. Still, not even all that money can catch everyone.

"I will qualify for the wage subsidy, that's all fine, but some of my employees do not want to come back because they are scared of getting sick," Charles Khabouth, chief executive of Ink Entertainment, which employed 2,600 workers at bars, restaurants, clubs, and live events before the pandemic, said in an interview. "So what do I do? I had to let them go because all of my properties were closed. I only kept about 30 of my staff."

In one superficial way, the April data were a positive surprise: Bay Street's consensus forecast had predicted twice as many job losses. But that's a thin silver lining. The devastation grows when you include people who are technically employed, but have lost most of their hours and those who have stopped seeking work because there is no work to be found.

The total number of "underemployed" Canadians in April was probably around four million, said Derek Holt, an economist at Bank of Nova Scotia.

"The traditional definition excludes these people from the labour force, but we are not in a normal situation," said Parisa Mahboubi, an economist at the C.D. Howe Institute, a Toronto-based think-tank. "Some people lost their jobs and are willing to work, but they can't because maybe they have kids at home and schools and daycares are not open. Or they are going to start looking for work when the economy reopens."

In April, almost 40 per cent of the labour force worked less than half their usual hours or not at all, according to StatCan; the same figure in February was 11.3 per cent, a contrast that perhaps paints a more accurate portrait of Canada's current situation.

"In May, we will probably have in the neighbourhood of at least another one million people losing jobs," said David MacDonald, an economist at the Canadian Centre for Policy Alternatives, a think-tank.

Bay Street's forecast might have been off because economists have been using applications for the Canada Emergency Response Benefit (CERB) as a proxy for job losses.

Canadians who are unemployed, sick with COVID-19 and cannot go into work, have a family member who is sick with the virus, or who have lost a majority of their work hours are all eligible. To date, some 7.6 million people have applied for CERB, more than double the number of official jobs lost in March and April.

The COVID-19 crisis struck workers in services industries first. Last month, the recession caught up with the "goods" sectors, as construction companies cut 21 per cent of their workers and manufacturing employment dropped by 16 per cent.

Almost all the jobs lost in April were classified as temporary layoffs, according to StatCan, a glimmer of hope that the economy could bounce back once the lockdowns end.

Mahboubi said it remains to be seen if the Canadian Emergency Wage Subsidy (CEWS) program - which subsidizes worker salaries by 75 per cent, up to $847 a week - will actually result in employers rehiring employees that have been temporarily laid off.

"The number of Canadians benefiting from the wage subsidy is significantly less than the number of Canadians receiving CERB," she said.

"The government needs to look into what are the reasons behind this and what they can do to repair their relationship between employers and employees."

Also of note in April's labour data was how Canada's major cities seemed to bear the brunt of the job losses. Montreal recorded the largest decline in employment of 18 per cent, while Toronto lost 539,000 or 15 per cent of its jobs.

"Accommodation, hospitality and food services industries are largely concentrated in our major cities," said Brendon Bernard, an economist at job search site Indeed Canada. "That could explain why cities tended to fare worse. If you look at just accommodation and food services, those sectors were just crushed."

Women were disproportionately affected in terms of lost hours and lost jobs in March, but the gender gap narrowed in April, as 14.6 per cent of men lost jobs compared with 16.9 per cent of women.

"Young women have still been the worst affected in this crisis," Bernard said. "But now you see that expanding out to young men, probably because of manufacturing and construction getting hit."

Based on the above article

Q. What are three consequences from a Macroeconomic Analysis perspective? Discuss these consequences in the context of the macroeconomic theories learned in this course. Consequences

1. Lower GDP
2. Monetary Effect
3. ?? I need the 3rd one with an Explanation

Q. Give three economic recommendations that should address these issues and provide an explanation for each one. Recommendations

1. Expansionary Fiscal Policy
2. Expansionary Monetary Policy
3. ?? I need the 3rd one with an Explanation

Q. Based on the above article closing paragraph on the benefits of macroeconomic analysis.