Canada loses 45,900 jobs in December in surprise setback

Fri Jan 10, 2014 9:25am EST
 
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By Louise Egan

OTTAWA (Reuters) - Canada's economy lost 45,900 jobs in December and the unemployment rate rose to 7.2 percent from 6.9 percent in a surprising setback that may add pressure on the central bank to consider cutting interest rates.

The employment data released by Statistics Canada on Friday was the weakest since March 2013. The report also showed hiring in 2013 was the slowest since 2009, with year-on-year employment gains in December of just 0.6 percent, or 102,000.

The Canadian dollar weakened immediately after the jobs data to a session low of C$1.0918 to the U.S. dollar, or 91.62 U.S. cents.

U.S. December employment data released on Friday was also weak, with employers hiring the fewest workers in almost three years.

Analysts in a Reuters poll had forecast, on average, Canada would see a gain of 14,600 jobs in the month, following three months of modest increases.

"It certainly suggests the economy ended 2013 on a sour note, and will simply reinforce the downward trend in the Canadian dollar," said Doug Porter, chief economist at BMO Capital Markets.

Statscan's survey of households to produce the data was conducted before the extreme cold weather hit many parts of Canada in December, although harsh conditions are not unusual for that month. "I don't think I'd want to lean on that crutch too heavily," said Porter.

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