Canada job losses worst since 1982 recession

Thu Apr 9, 2009 3:16pm EDT
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By Louise Egan

OTTAWA (Reuters) - Canada continued to post heftier than expected job losses in March as the economy spiraled downward, hardening expectations of more action from the Bank of Canada to stimulate lending.

The unemployment rate jumped to a seven-year high of 8 percent last month and the economy lost 61,300 more jobs, resulting in the sharpest five-month employment decline since the 1982 recession, Statistics Canada said on Thursday.

Statscan also reported a small trade surplus in February after two months of deficit and a 0.7 percent decline in new housing prices that same month.

Amid expectations that the economy contracted at the fastest pace on record in the first quarter, market reaction to the job numbers was muted.

"There were very few surprises here and this is about exactly what you would expect given the economic backdrop and the kind of losses we saw in the U.S," said Doug Porter, deputy chief economist at BMO Capital Markets.

The Canadian dollar initially firmed against the U.S. currency to C$1.2345, or 81 U.S. cents, from C$1.2365 to the U.S. dollar, or 80.87 U.S. cents, ahead of the data. Analysts said the report forced some players expecting even bigger job losses to cover bets that the Canadian dollar would weaken.

On average, economists had forecast 55,000 jobs would be lost, though some estimates had been for as much as 90,000.

Prime Minister Stephen Harper said the job figures were "not good news" but repeated his assertion that when the crisis was over, Canada would face a shortage of skilled workers.   Continued...

<p>A man looks at a job board at a job fair in Toronto, April 1, 2009. REUTERS/Mark Blinch</p>