Canada January job losses biggest on record

Fri Feb 6, 2009 9:19am EST
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By Louise Egan

OTTAWA (Reuters) - Canada suffered its worst job losses in over three decades in January as the recession forced employers to cut a record 129,000 workers and pushed the unemployment rate to 7.2 percent from 6.6 percent in December.

The report by Statistics Canada showed the biggest monthly downturn in employment since the federal agency began using its current methodology in 1976. It also showed record job losses in the manufacturing sector.

"I can't see one glimmer of hope in this report when we dig beneath the headlines," said Derek Holt, economist at Scotia Capital.

"The optimists are just taking body blows all over the place here," he said.

The Canadian dollar fell immediately after the report to C$1.2506 to the U.S. dollar, or 79.96 U.S. cents, from C$1.2415, or 80.55 U.S. cents, earlier.

The monthly drop in employment, far worse than expected, single-handedly wiped out the net job gain in 2008 of less than 100,000. Canada has shed 213,000 jobs since October.

Analysts in a Reuters poll had forecast a job loss of 40,000 and an unemployment rate of 6.8 percent.

The monthly decline was also bigger than any seen in the previous economic troughs of the 1980s and 1990s, Statscan said. That raised fears this recession will be deeper and more protracted than policy-makers have predicted and that the Bank of Canada will be compelled to cut rates further from their 50-year low of 1 percent.   Continued...

<p>People walk around booths with job recruiters at a career fair in Los Angeles February 3, 2009. REUTERS/Lucy Nicholson</p>