Canada job market sputters, exports dip

Fri Mar 9, 2012 1:33pm EST
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By Louise Egan

OTTAWA (Reuters) - Canada unexpectedly failed to create any new jobs in February, continuing a trend of stalled employment despite signs of a healthy domestic economy and a comeback by the U.S. job market.

The net job losses in February totaled 2,800, dragged down by retail and wholesale trade, transportation and other services, Statistics Canada said on Friday.

The agency also reported a drop in exports in January, after two months of gains, biting into the country's trade surplus.

The reports mean less pressure on the Bank of Canada to raise its benchmark interest rate soon, even though the bank issued a more upbeat economic outlook on Thursday and is worried that ultra-low borrowing costs are fueling record high household debt.

Markets had expected 14,500 jobs to be created in the month.

The unemployment rate nonetheless dropped to 7.4 percent from 7.6 percent in January, largely because 38,000 people dropped out of the workforce, the most since January 2009.

"Clearly another month of disappointing labor market numbers," said Paul Ferley, assistant chief economist at Royal Bank of Canada.

"It's providing an indication that, at the moment, the labor markets don't seem to be sharing the strengthening that we're seeing in other indicators," he said.   Continued...