Statistics Canada says 45,900 jobs lost in December, unemployment rate rises
Published Friday, January 10, 2014 8:54AM EST
Last Updated Friday, January 10, 2014 2:49PM EST
Economists had projected a gain of about 14,000 jobs in December, but Canada instead shed a surprising 45,900 jobs last month, Statistics Canada said Friday.
The country’s unemployment rate also rose to 7.2 per cent from 6.9 per cent in November -- making Canada’s unemployment rate higher than in the United States, which had an unemployment rate of 6.7 per cent.
BMO Capital Markets chief economist Douglas Porter said in a report Friday that the “dismal” jobs data will place pressure on the plummeting Canadian dollar, and increase the possibility of a rate cut by the Bank of Canada.
However, Porter said he believes the Bank will need to see more than one month of “economic underperformance” before considering a rate cut.
Following the jobs report, the loonie fell half a cent to 91.65 cents -- its lowest level since 2009.
TD Bank senior economist Sonya Gulati said the labour market ended 2013 on a very soft note.
“Not only was the headline contradiction in December sizeable, but the losses were broad-based across industries and exclusively seen in full-time positions,” Gulati wrote in a report Friday.
Last month Canada saw the biggest month of employment growth in more than a decade.
December saw a decline of about 60,000 full-time jobs. Part-time jobs, however, were up by 14,200.
Meanwhile, the private sector shed 26,000 jobs and government hiring went up by 25,000.
However, Gulati said the disappointing December report may be a one-off rather than a new norm, and says economic indicators suggest the Canadian economy will grow by roughly 2.5 per cent in the fourth quarter.
“The underlying momentum will likely encourage employers to once again add to their payroll, albeit at a modest rate of roughly 10-15,000 positions per month,” she said.
Gains in B.C. and Newfoundland and Labrador
Across Canada, British Columbia and Newfoundland and Labrador were the only provinces to see increased numbers, while Ontario, Alberta, Quebec, and the Atlantic provinces suffered losses.
The number of people working in British Columbia in December increased by 12,800, while Newfoundland and Labrador gained 1,900 jobs.
Ontario and Alberta, meanwhile, lost 39,300 and 11,700 jobs, respectively. And despite little change in the employment rate in Quebec, the province lost 10,200 jobs.
Monthly job numbers are volatile and it is important to remember that Canada’s overall trend is positive, Finance Minister Jim Flaherty said in a statement Friday.
“Indeed, for 2013, Canada’s economy created more than 100,000 net new jobs,” Flaherty said. “This is encouraging and shows that Canada’s economy is on the right track.”
Job losses, however, are a “reminder that the economy remains fragile,” said Flaherty, who emphasized the importance of keeping taxes low to create an “environment where job creation can flourish.”
In addition to low taxes, Industry Minister James Moore said the government is responding to job losses through the Canada Jobs Grant, and by working with the provinces to provide workers with skills training.
“If you step back and look at the overall jobs picture, we still have the strongest job record in all the G7,” Moore said at a news conference Friday. “Overall Canada is doing very well, certainly when you look at how far we’ve come since the worst point in the recession.”
The total employment gains in 2013 amounted to 102,000 -- the slowest growth rate since 2009, Statistics Canada said.
Decline in educational services, agriculture
Health care and social assistance were the only industries with employment gains in December, with an additional 22,000 jobs.
Meanwhile, an increase in education services jobs over the previous two months was offset by a loss of 19,000 jobs in December.
And 15,000 fewer people worked in the “other services” industry in December. This includes personal care services and civic and social organizations.
The agriculture industry and natural resources also experienced declines, with 9,800 and 8,000 jobs lost, respectively.
The country’s trade deficit with the world went up in November, to $940 million, as imports increased to $40.7 billion, while exports remained steady at $39.8 billion, Statistics Canada reported earlier this week.
U.S. job numbers
The United States expected an increase of 193,000 jobs, but only 74,000 jobs were created in December. The unemployment rate, meanwhile, went to 6.7 per cent -- not because people were being employed, but because fewer people were actually looking for jobs, Reid said.
With files from The Canadian Press