Canada Posts First Job Decline in Six Months
Canadian employment fell for the first time in six months in January on declines in manufacturing and education.
Employment fell by 21,900 following December’s gain of 31,200, Statistics Canada said today in Ottawa. The unemployment rate fell to 7 percent from 7.1 percent, the lowest since December 2008’s 6.8 percent, as fewer people looked for work. Economists surveyed by Bloomberg News projected a 5,000 job gain and 7.2 percent unemployment, according to the median of 23 forecasts.
The jobs decline mirrors other recent signs of weaknesses in the world’s 11th largest economy, such as falling exports and inflation rates, leading policy makers to reduce economic growth forecasts. Bank of Canada Governor Mark Carney has said the country will need to rely more on business investment and exports for growth as the housing market slows.
“It’s going to be a dicey period throughout the first part of this year,” David Watt, chief economist at HSBC Bank Canada, said from Toronto, who forecast a 15,000 job decline. “I was more surprised by the resilience of the labor market and anticipated, as we turned to this year, the employment numbers were going to catch up with the rest of the economy.”
The Canadian dollar depreciated 0.4 percent to C$1.0015 per U.S. dollar at 9:58 a.m. in Toronto, weakening through parity.
Full-time employment fell by 20,600 in January and part- time positions by 1,400, Statistics Canada said.
The labor force shrank by 57,500 in January, the largest drop since April 1995, and the participation rate fell to 66.6 percent from 66.8 percent.
The biggest job losses by industry were a 30,900 drop in education and 21,600 in manufacturing. The losses were partly offset by gains of 17,100 new jobs in construction and 17,200 in professional, scientific and technical services.
Canada Bread Co., which is 90 percent owned by Maple Leaf Foods Inc., said Jan. 30 it will fire about 120 workers when closing bakeries in New Brunswick and Alberta this year.
Private companies cut 18,800 workers and public-sector employment dropped by 27,000 in January. The federal government has been reducing its workforce as part of efforts to eliminate its budget deficit.
Workers designated by Statistics Canada as employees fell by 45,800 while the self-employed increased by 23,900 in January.
“We view this weakness as payback following a period of surprising strength and not the beginning of a new trend,” said David Tulk, chief Canada macro strategist at Toronto-Dominion Bank’s TD Securities unit. “With economic growth expected to remain soft through the first half of 2013, we see a modest pace of employment.”
Average hourly wages of permanent employees rose 2 percent in January from a year earlier, slower than the prior reading of 2.5 percent.
The province of Saskatchewan took over the country’s lowest jobless rate in January, falling to 4 percent from 4.6 percent. Alberta’s rate remained at 4.5 percent in January. Ontario’s jobless rate fell to 7.7 percent from 7.9 percent, while Quebec’s dropped to 7.1 percent from 7.3 percent.