Gloom sets in after Canada jobs, trade reports

Fri Mar 13, 2009 11:51am EDT
 
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By Louise Egan

OTTAWA (Reuters) - Canada's economy lost more jobs than expected in February and posted a record trade deficit in January, reports showed on Friday, as evidence mounted that the recession may be more severe than many had previously thought.

Statistics Canada said net job losses totaled 82,600 last month, compared with forecasts for a decline of 52,500. That brought total job losses in the past four months to 295,000.

The unemployment rate climbed to 7.7 percent, the highest level since September 2003.

"A U.S.-style pace of labor market deterioration has landed on Canada's doorstep," said Derek Holt, economist at Scotia Capital.

Adjusting for their relative size, the Canadian economy is bleeding jobs faster than the U.S. economy, which shed 651,000 jobs in February.

The bleak data added to news last month that job losses in January were the steepest on record at 129,000, sending shock waves through the country and nudging politicians to push a fiscal stimulus package through Parliament.

Expect more job destruction ahead, analysts warned, as the global financial crisis batters Canada's export-reliant economy and has already triggered big layoffs in the auto industry and other manufacturing sectors, as well as in forestry companies.

"If, in fact, the Canadian economy is going to lose half a million jobs this year it seems that we're almost halfway there two months into the year," said Paul Moist, president of the Canadian Union of Public Employees.   Continued...

 
<p>Workers cross a pedestrian bridge from the parking lot as they arrive for the afternoon shift at the DaimlerChrysler Assembly plant in Brampton February 14, 2007. REUTERS/J.P. Moczulski</p>