Toronto/CMEDIA: Approximately 84,000 jobs reportedly were lost in February to Canada’s economy while the unemployment rate edged up to 6.7 percent, Statistics Canada said on Friday.
Canada’s labour market suffered a setback, Largely driven by a drop in full-time and private sector jobs, in one of the worst monthly job losses seen in years outside of the pandemic.
Employment mostly fell in the goods and services-producing industries, with 18,000 jobs lost in wholesale and retail trade, 12,000 lost in construction and 9,200 lost in manufacturing.
Worst impacted by the drop were men aged 25 to 54 and young people aged 15 to 24.
The labour market took a “worrisome turn” in February, particularly with the loss of full-time, private sector roles, said Katherine Judge, executive director and senior economist at CIBC Capital Markets.
In contrast to analyst expectations that the labour market would gain 10,000 jobs, the drop in jobs and the uptick in unemployment, she wrote indicated that the unemployment rate would rise at a slower pace than it did.
“This is clearly a very worrisome report for the [Bank of Canada] that shows that labour market slack has increased and activity is frozen amidst trade uncertainty,” said Judge.
According to Statistics Canada, in nine of the 13 provinces and territories last month, the unemployment rate rose or was unchanged.
The youth unemployment rate for people aged 15 to 24 ticked up to 14.1 percent, while the rates for racialized youth were “notably higher” compared with non-racialized, non-Indigenous youth, the data agency noted.
Canada Prime Minister Mark Carney said that despite losing 84,000 jobs last month, Canada’s job creation is still way ahead of the US.
“The fact that the unemployment rate is almost unchanged from a year ago does make me a little bit calmer about this result,” said Douglas Porter, chief economist at the Bank of Montreal, in an interview.
“But still, I think the overriding message here is it was very weak at the start of the year. We’ve seen almost no job growth whatsoever over the last 12 months. And that’s not a positive for the economy. “
Carney says U.S. trade uncertainty ‘causing big adjustments’ as Canada reports February job losses
Carney was asked at a news conference in Norway on Friday about Statistics Canada’s most recent report indicating that the economy lost 84,000 jobs in February while the unemployment rate edged up to 6.7 per cent.
The report being “exceptionally weak” should quash any talk about interest rate hikes, which markets had been pricing in for the second half of the year, said Porter.
“I actually think the bank should be actively considering the possibility of rate cuts if this kind of weakness in the economy continues in the months ahead,” he said.
“Beyond the fact that consumers are going to be burdened with the hit to disposable income from higher oil prices, we’ve still got the uncertainty of the USMCA, and on top of that we’ve got no job growth. I do not see the Bank of Canada hiking in that environment.”
