Canada jobless rate hits 2-year high, but trade outlook improves

Unemployment rate 7.2 per cent
By David Ljunggren
|hrreporter.com|Last Updated: 02/09/2016

OTTAWA (Reuters) — Canada lost 5,700 jobs in January and the unemployment rate edged up to a two-year high of 7.2 per cent, in part because of further job losses in the oil-producing province of Alberta, underlining the economy's struggles with weak energy prices.

Analysts polled by Reuters had forecast a gain of 5,500 positions and for the unemployment rate to stay at 7.1 per cent. It last hit 7.2 per cent in December 2013.

Statistics Canada said on Friday that in the year to January, employment increased by an anemic 125,500 jobs, or 0.7 per cent.

"Overall, the story is the economy is struggling to grow and it is struggling to produce much in the way of employment," said BMO Capital Markets chief economist Doug Porter.

The jobless rate in the energy-producing province of Alberta rose to 7.4 per cent, the highest since February 1996. January marked the first month since December 1988 that the Alberta unemployment rate exceeded the national rate.

The Bank of Canada last month decided not to cut interest rates but admitted it was not an easy call, as concern about a rapid decline in the currency clashed with an economic slump. 

In January, the economy created 5,600 full-time jobs and lost 11,300 part-time positions.

"We're looking at something that is vaguely consistent (with) a slower pace of hiring, which makes perfect sense given the conditions in the wider economy," said David Tulk, chief Canada macro strategist at TD Securities.

The Canadian dollar weakened on the data, touching $1.3785 to the U.S. dollar, or 72.54 U.S. cents. 

The six-month moving average for employment growth was 8,900, down from 10,700 in November.

While the weak dollar is hitting jobs, it is also helpingCanada's exporters.

The trade deficit unexpectedly shrank to $585 million in December from $1.59 billion in November as exports jumped by a healthy 3.9 per cent.

Analysts polled by Reuters had forecast a deficit of $2.2 billion. Statscan said imports grew 1.6 per cent after three consecutive monthly decreases.

Exports to the United States, which accounted for 74.8 per cent of Canada's global total in December, grew 2.9 per cent while imports grew 1.3 per cent. As a result, Canada's trade surplus with the United States swelled to $3.19 billion from $2.63 billion in November.

Canada posted a record $23.32-billion trade deficit in 2015.

Add Comment

  • *
  • *
  • *
  • *