Canada Loses Jobs But Unemployment Drops To 7% Lowest Since 2008

Canadian employment fell in January following 12-months of robust job growth, including two consecutive months of employment increases. Despite this, Canada’s unemployment rate dropped one-tenth of a point to 7%, the lowest since December 2008.

Canada lost about 21,900 jobs in January.

Nearly all of the job losses were full-time jobs in the provinces of Ontario and British Columbia.

The result was weaker than economists had expected.

Number Job Seekers Drop, Holding Down Unemployment

A drop in the number of people looking for work pulled the unemployment rate down 0.1 percentage points to 7%.

Nearly 58,000 Canadians left the workforce or stopped looking for employment in January 2013. It was the nation’s largest labor market exodus since 1995.

Compared with the same period in 2012, full-time employment increased by 1.6%.

Analysts said the previous two-month’s gain of 100,000 jobs and the 12-month gain of 286,000 jobs seemed unsustainable given the softness of the Canadian economy during the second half of 2012.

Statistics Canada reported that exports fell 2.1% in December 2012, continuing a trend in a part of the economy that account for about one third of Canada’s economic output.

“Combined with the steep drop in housing starts as well as the still-wide trade deficit, the jobs report rounds out a day of infamy for Canadian economic stats,” said Douglas Porter, chief economist with BMO Capital Markets, told the Calgary Herald.

“To some extent, the drop in jobs appears to be a payback for the surprising strength in the second half of last year, and would normally be little cause for concern,” said Porter. “However, with housing softening notably, and consumers and governments not in much mood, or ability, to spend, the economy will need a major helping hand from a stronger U.S. performance in the year ahead to help generate renewed job gains.”

Employment in oil-rich western Canada continued to show strength.

Alberta’s unemployment rate was unchanged in January at 4.5%. That was second only to Saskatchewan’s 4% unemployment rate, according to Statistics Canada.

Alberta and Saskatchewan added 9,700 and 7,300 jobs respectively in January.

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