Canada jobless rate spikes to 11-year high in May
By Louise Egan
OTTAWA (Reuters) - Canada's unemployment rate spiked to an 11-year high in May as the worst recession since World War Two led to massive lay-offs in the factories of Ontario, once the country's manufacturing powerhouse.
Statistics Canada said on Friday the net job losses in May totaled 41,800 and the unemployment rate jumped to 8.4 percent from 8.0 percent in April.
The number of factory jobs in the province of Ontario, the manufacturing hub, fell to its lowest level since 1976 when record-keeping began, the federal agency said with the auto sector suffering the worst losses.
The data was worse than expected, triggering an immediate drop in the Canadian dollar. The report comes as manufacturers are being hammered by an unprecedented rise in the value of the currency against the U.S. dollar, which hurts exports.
Analysts surveyed by Reuters had predicted employers would drop 33,000 staff from payrolls and the jobless rate would rise to 8.2 percent.
"Worse than expected report ... Obviously Ontario's economy is taking the brunt of the sharp downturn in exports and the restructuring in the auto sector," said Sal Guatieri, senior economist at BMO Capital Markets.
The Canadian dollar weakened slightly to around C$1.1033, or 90.64 U.S. cents, from around C$1.1022, or 90.73 U.S. cents, just before the data.
The swift appreciation of the Canadian dollar, which jumped 9.3 percent against the U.S. dollar in May and touched an eight-year high earlier this month -- prompted a warning from the Bank of Canada on Thursday. Continued...