Canada surprises with big job losses in July

Fri Aug 10, 2012 9:16am EDT
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By Louise Egan

OTTAWA (Reuters) - Canada's economy unexpectedly lost 30,400 jobs in July in a third disappointing month for the labor market, suggesting the central bank will stay on the sidelines for longer as a global slowdown crimps growth at home.

The performance contrasts with new signs of strength in U.S. hiring and was worse than even the most bearish forecast in a Reuters survey. An average of 5,000 people lost their jobs in each of the last three months, according to the Statistics Canada data on Friday.

"It seems as if the global headwinds have caught up to the Canadian economy," said David Tulk, chief macro strategist at TD Securities.

Some of the details in the report were slightly more encouraging. The net job losses resulted from the elimination of 51,600 part-time positions, which overshadowed the 21,300 full-time jobs created. There was little change in both public and private sector employment.

Wages rose 3.9 percent in the year to July, up from 3.3 percent in June, as measured by hourly wages for permanent employees.

"The details are vaguely stronger than the headline would suggest ... However, all in all I think it's a significant disappointment for Canada and one that is likely to weigh into expectations for the Canadian dollar," said Camilla Sutton, chief currency strategist at Scotiabank.

The Canadian dollar weakened to C$0.9970 against the U.S. dollar, or $1.0030, from about C$0.9948 just before the data's release.

The jobless rate climbed to 7.3 percent from 7.2 percent, with the biggest layoffs in wholesale and retail trade and in professional, scientific and technical services.   Continued...