Canada's job reports look optimistic. Is it really that rosy?

As shown above, from tradingeconomics.com, quoting from Statistics Canada, the jobs have been coming back steadily since May. Stats Canada reported that Canada is now within 720K jobs of pre-covid status. This is actually impressive.

But is it really as good as it seems? Let's look a bit under the hood.

Here above is reporting from ADP, derived from ADP’s payrolls data, measuring the change in total nonfarm payroll employment each month on a seasonally-adjusted basis. Here you can see private businesses in Canada shed 240.8 thousand workers in September of 2020, after cutting 205.4 thousand jobs in August.

In fact, this chart doesn't even show the full damage, apparently, as Reuters reports; "The August data was revised to show jobs declined by 770,600 rather than by 205,400". In other words, the second bar from the left, showing the report for August, should actually be extended lower to be more than triple its size.

It seems we're getting conflicting data, Stats Canada is providing great news on jobs coming back while ADP is giving us a completely different picture, with jobs continually going away.

This raises the need for further analysis, to understand why would private businesses continue to shed jobs while the rest of Canada is getting back to work so nicely. This does raise alarm bells.

Just for comparison here is the ADP report for the USA covering the same monthly periods.

It shows that while the US shed almost 20 million jobs, mostly in April, the jobs have been coming back since May and they have recovered about half of the jobs as reported by ADP.