Canada job losses worst since 1982 recession

Thu Apr 9, 2009 8:19am EDT
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By Louise Egan

OTTAWA (Reuters) - Canada's unemployment rate jumped to a seven-year high in March and the economy lost more jobs than expected, resulting in the sharpest five-month employment decline since the 1982 recession.

Statistics Canada on Thursday said net job losses in March totaled 61,300 -- all of them full-time -- as the economy contracted at what is believed to be the fastest pace on record in the first quarter. Analysts surveyed by Reuters had forecast job losses of 55,000.

The unemployment rate climbed to 8 percent, a level not seen since January 2002 and up from 7.7 percent in February.

The report hardens expectations the Bank of Canada will eventually make a foray into nonconventional policies to stimulate the economy as it runs out of room to cut interest rates.

"Given these sort of weak economic conditions, certainly it will keep monetary policy bias toward ease," said Paul Ferley, assistant chief economist at the Royal Bank of Canada.

"The issue is now whether they will respond with interest rates or move to some sort of credit easing, but certainly they will be looking for ways to add further liquidity to the system," he said.

Economists said the report was close enough to expectations that it would have little market impact.

The Canadian dollar firmed slightly after the data, rising to C$1.2345 to the U.S. dollar, or 81 U.S. cents, from C$1.2365 to the U.S. dollar, or 80.87 U.S. cents, ahead of the data.   Continued...

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