Canada jobless rate hits two-year high, but trade outlook improves

Fri Feb 5, 2016 10:29am EST
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By David Ljunggren

OTTAWA (Reuters) - Canada lost 5,700 jobs in January and the unemployment rate edged up to a two-year high of 7.2 percent, in part because of further job losses in the oil-producing province of Alberta, underlining the economy's struggles with weak energy prices.

Analysts polled by Reuters had forecast a gain of 5,500 positions and for the unemployment rate to stay at 7.1 percent. It last hit 7.2 percent in December 2013.

Statistics Canada said Friday that in the year to January, employment increased by an anemic 125,500 jobs, or 0.7 percent.

"Overall, the story is the economy is struggling to grow and it is struggling to produce much in the way of employment," said BMO Capital Markets chief economist, Doug Porter.

The Alberta jobless rate rose to 7.4 percent, the highest since February 1996. January marked the first month since December 1988 that the Alberta rate exceeded the national one.

The Bank of Canada last month decided not to cut interest rates but admitted it was not an easy call, as concern about the weaker currency clashed with an economic slump.

In January, the economy created 5,600 full-time jobs and lost 11,300 part-time positions.

"We're looking at something that is vaguely consistent (with) a slower pace of hiring, which makes perfect sense, given the conditions in the wider economy," said David Tulk, chief TD Securities Canada macro strategist.   Continued...

Railcars with containers move through the Canadian National (CN) railyards in Edmonton February 22, 2015. REUTERS/Dan Riedlhuber