Employment fell by 2,800 in February, the third drop in five months and one that wasn’t anticipated by any of the 25 economists in a Bloomberg News survey. Some 37,900 people left the workforce in the month, the largest drop since January 2009. Statistics Canada also reported the merchandise trade surplus narrowed to C$2.10 billion ($2.11 billion) from a revised C$2.86 billion in December as exports fell by the most in 11 months.
Job growth has been slowing since the middle of last year after hiring gains led the economy out of a recession in 2009. Yesterday, the Bank of Canada kept its key interest rate at 1 percent in the longest pause since the 1950s and said there are some signs of improving domestic spending and diminished risks from the global financial crisis.
“It’s going to be a slow process, even though we see sentiment recovering a bit,” said Jimmy Jean, a strategist in the fixed-income group at Desjardins Capital Markets in Montreal. “In terms of the domestic picture that the Bank of Canada referred to as being a little bit firmer, these reports could be a disappointment.”
The drop in the number of people in the labor force drove a decline in the jobless rate to 7.4 percent from 7.6 percent, Statistics Canada reported from Ottawa.
Waiting for Developments
“The employment data I find most disappointing, it’s six months we’ve been waiting for more positive developments,” Jean said. Economists surveyed by Bloomberg News had forecast an increase of 15,000 jobs and a 7.6 percent unemployment rate.
The U.S. today reported its best six-month job streak since 2006, with a non-farm payrolls gain of 227,000 in February.
The Canadian dollar was little changed from yesterday at 99.01 cents per U.S. dollar at 3:37 p.m. in Toronto, erasing earlier losses after the U.S. figures were released. One Canadian dollar purchases $1.0100. Yields on two-year Canadian government bonds increased 1 basis point to 1.18 percent.
By industry, retailing and wholesaling led the job decline with a 37,400 decrease, followed by a 21,900 drop for transportation and warehousing, Statistics Canada said. Health care and social assistance fell 21,700 while public administration declined by 14,700. Read full article here.