The Canadian soft patch continues, and it broadens
OTTAWA ? Canada?s job market pulled back dramatically in March, shedding the most positions in four years ? surpassing those created the previous month and pushing the unemployment rate up to 7.2%.
'It doesn?t get much uglier than this'
Read what the analysts say about Canada?s massive miss on job expectations
Statistics Canada said 54, 500 fewer people were working last month, nearly all full-time workers and mainly in the private sector. That more than reversed the 50,700 job gain in February.
?More bad news today: Trade deficit jumps to $1-billion as exports drop
Adding to the gloom were the trade figures for February, which showed Canada?s deficit increased to $1.02 billion on lower exports and higher imports. Traders had expected a small surplus.
The Canadian dollar weakened to a session low against its U.S. counterpart after employment data in both nations came in far weaker than expected.
The Canadian currency fell to C$1.0207 to the U.S. dollar, or 97.97 U.S. cents, down from Thursday?s North American session close at C$1.0123 to the U.S. dollar, or 98.78 U.S. cents, after the data was released.
North American stock markets were sharply lower where American employers hired at the slowest pace in nine months in March, a sign that Washington?s austerity drive could be stealing momentum from the economy.
The economy added just 88,000 jobs last month and the jobless rate ticked a tenth of a point lower to 7.6% largely due to people dropping out of the work force, Labor Department data showed on Friday.
Analysts polled by Reuters had expected a gain of 200,000.
In Canada the biggest declines were in accommodation and food services, shedding 24,900 jobs, with public administration ? accounting for almost one-third government employees ? and manufacturing both losing just over 24,000 positions, the federal agency said Friday.
As a result, the unemployment rate rose 0.2 percentage points to 7.2% in March.
Economists had forecast an increase in jobs of up to 6,500 during the month and an unemployment rate unchanged at 7%.
?The Canadian soft patch continues, and it broadens,? said Douglas Porter, chief economist at BMO Capital Markets.
?Prior to today, there had been a seeming disconnect in Canada between sluggish GDP growth and surprisingly perky employment gains,? he said. ?While March?s hefty decline no doubt exaggerates the weakness in the job market, renewed solid employment gains will be difficult to come by in a world of soft domestic spending and a still-strong dollar.?
The March losses were the biggest since February 2009, at the tail-end of the recession, when 69,300 people found themselves out of work.
There were 85,000 fewer people working in the private sector in March. The number of self-employed increased by 39,000, while the ranks of the public sector were basically the same.
People aged 25 to 54 made up the bulk of those losing jobs, at 47,00, while there was little change among youths and people 55 or older.
Canada?s job market has proven to be unpredictable. Prior to February?s big increase, employment was down 21,900 in January and up 31,200 in December.
That uncertainty is reflected in the country?s economic performance, which slowed more than expected at the end of 2012 and is expected to remain weak well into this year.
The Bank of Canada, as a result, has been stuck in neutral ? with its trendsetting interest rate remaining at 1% since September 2010. Most economists do not expect the rate to begin rising until mid-2014 or later.
In a separate report Friday, Statistics Canada said the country?s trade deficit widened in February to $1-billion from $746-million a month earlier.
Imports were down 0.6% for the month to $38.5-billion, while imports edged up 0.1% to $39.5-billion ? extending the trade deficit to 11 consecutive months.
Canada?s trade surplus, meanwhile, with the United States ? this country?s largest trading partner ? shrank to $3.4-billion in February from $3.9-billion, with exports falling 1.1% and imports rising0.8%.
The trade shortfall with nations other than the U.S. narrowed to $4.4-billion from $4.6-billion in January. Exports rose 0.9% and imports declined by the same measure.
Source: http://business.financialpost.com/2013/04/05/canadas-jobless-rate-ticks-up-as-economy-sheds-55000/
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