As a report showed the Canadian economy lost 129,000 jobs in January, Finance Minister Jim Flaherty said that further job losses should be expected throughout the year.

He said that the global economies, in particular the U.S.'s, are in turmoil and there's no way for Canada to avoid the repercussions.

Flaherty, speaking in Toronto, called on the Liberals to help the government quickly pass the federal budget.

"The key now is, we have to get this budget through, we have to get the money into the economy, there's no point in doing it in six or eight months," he said. "We need this to happen in the short-term."

Flaherty did not rule out further spending beyond the stimulus called for in the budget.

"If it is necessary to do more, we will do more," he said.

Flaherty also urged the G7 countries, who are meeting next week in Rome, not to put up protectionist trade measures.

In Ottawa, the Liberals wasted no time Friday attacking the Conservatives on their handling of the economy.

"Not only did they not see this coming, but they have no idea where they are going," Liberal finance critic John McCallum said to kick off question period.

Flaherty was not in the House Friday to respond.

His parliamentary secretary, Ted Menzies, urged the opposition parties to help speed up the passage of the budget, which includes $19 billion in stimulus spending and tax cuts for 2009.

The NDP said the stimulus package was not enough and called on the Tories to allocate more cash to help the economy.

Earlier Friday, the Statistics Canada report showed the economy lost 129,000 jobs in January -- the biggest monthly decline in more than three decades.

The losses pushed the country's unemployment rate up 0.6 percentage points from December to 7.2 per cent.

Meanwhile, in the U.S., 598,000 jobs were lost in January -- the most since 1974.

As a result, the jobless rate in the U.S. surged to 7.6 per cent in January, from 7.2 per cent in December.

Analysts on both sides of the border were too optimistic in their predictions prior to the release of the unemployment figures.

Experts had estimated the Canadian economy would lose about 40,000 jobs and that the American economy would lose 524,000 jobs.

Ian Lee, director of the MBA program at Carleton University's Sprott School of Business, said the models economists use are not good at predicting the "unexpected or the exceptional."

"I think they were caught off guard because their models would have worked in a normal recession but this is not a normal recession," Lee told CTV Newsnet on Friday from Ottawa.

Lee said he thinks the earliest the recession will hit the bottom will be 2010 but it's possible it could come in 2011.

"The United States hasn't hit the bottom and we haven't hit the bottom so we can expect that unemployment rate to increase next month and the month after and the month after," he said.

Jobless rate in Canada

In Canada, the drop in employment in January was greater than any monthly decline during the previous economic downturns of the 1980s and 1990s.

Almost all of the Canadian job losses were full-time positions.

The losses were most pronounced in manufacturing, where the net drop totalled 101,000 -- the largest monthly decline in the industry on record.

Job losses were also recorded in the following industries: furniture, computer and electronic, non-metallic mineral product, electrical equipment, appliance and components, clothing manufacturing, transportation and warehousing, business, building and other support services.

The only industry with notable gains was health care and social assistance, which saw a boost of 31,000 jobs.

Provincially, Ontario, British Columbia and Quebec accounted for the entire employment decrease in January, the report said.

Ontario lost 71,000 jobs, the largest in more than three decades.

British Columbia lost 35,000 jobs and Quebec lost 26,000.

U.S. jobless report

In the U.S., the unemployment rate for January was the highest reported since September 1992.

Similar to Canada, a large chunk of the U.S. job losses were in the manufacturing sector.

Factories cut 207,000 jobs in January, the largest one-month drop since October 1982.

Meanwhile, construction companies slashed 111,000 jobs, professional and business services axed 121,000 jobs, retailers laid off 45,000 and leisure and hospitality operators cut 28,000 positions.

The report showed job gains in education and health services and in government jobs.

U.S. President Barack Obama is trying to pass a $900-billion-plus plan to stimulate the economy but it has been delayed in Congress.

On Friday, Obama urged legislators to pass it the package saying the latest jobless numbers demand action.

"These numbers demand action. It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work. It is time for Congress to act," Obama said.

With files from The Associated Press