The Canadian economy unexpectedly shed 45,900 jobs last month as employers cut full-time positions.
The country’s jobless rate rose to 7.2 per cent in December from 6.9 per cent as more people looked for work, Statistics Canada said Friday.
Canada’s job growth slowed by year’s end as a string of companies, from Sears Canada to Potash Corp. and BlackBerry, announced job cuts late last year while a wave of manufacturers, particularly in Central Canada, said they plan to close plants. Through 2013, job gains in Canada averaged 8,500 a month, a sharp drop from the average of 25,900 new positions per month in 2012.
December’s weak reading, which sent the Canadian dollar to a new four-year low, was far below expectations. Economists had forecast about 14,000 new jobs and an unchanged rate.
Private-sector firms trimmed 26,300 positions while the public sector added 18,200 jobs and the number of self-employed shrank by 37,900.
Youth unemployment rose, with their jobless rate climbing to 14 per cent from 13.4 per cent.
Canada loses 46,000 jobs, unemployment rate climbs to 7.2% - The Globe and Mail
Canadian dollar sinks on ugly jobs report: ‘Needed this like another hole in the head’
Jobs report drives loonie down
Ugh, and ugh.
This morning's employment report from Statistics Canada is downright ugly, with 46,000 jobs lost in December and the unemployment rate climbing by 0.3 of a percentage point to 7.2 per cent as more people went hunting for work.
In the United States, growth in the labour market slowed last month to just 74,000 positions, though the jobless rate eased markedly to 6.7 per cent.
The two reports combined added more pressure to the Canadian dollar, which tumbled fast to about 91.60 cents U.S. within minutes of the reports.
"The Canadian dollar needed this like another hole in the head," said chief economist Douglas Porter of BMO Nesbitt Burns.
"The dismal jobs data will simply pour on the pressure for the sagging Canadian dollar, which was only spared more pain by a disappointing U.S. jobs gain in December," he added.
The loonie, as Canada’s dollar coin is known, plunged as the job losses signalled that Bank of Canada Governor Stephen Poloz will likely be “dovish for longer,” said chief currency strategist Camilla Sutton of Bank of Nova Scotia.
Coupled with that is the fact that Canada’s weak report – economists had projected gains of about 13,000 jobs – plays into a string of several soft economic readings of late.
As The Globe and Mail’s Tavia Grant reports, the Canadian reading is all the more troubling because the job losses were driven by an erosion of full-time work.
That brought growth in the labour market over the course of 2013 to 102,000, Statistics Canada said, or 0.6 per cent. The monthly average was 8,500 jobs, well down from 2012’s average of almost 26,000.
“December’s labour force survey was awful across the board with an ugly headline number and even worse details,” said senior economist Krishen Rangasamy of National Bank Financial, noting that the overall showing for last year was the “worst net jobs tally” since 2009.
In the United States, our Washington correspondent Kevin Carmichael writes, the U.S. economy sent a mixed signal, given the slow jobs growth but declining unemployment rate. Economists had expected the report to show job creation of 197,000, though a jobless rate still at 7 per cent.
The reading is expected to see the Federal Reserve move cautiously on its stimulus pullback.