Canada loses jobs in March, full-time numbers jump

Fri Apr 8, 2011 7:53am EDT
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By Louise Egan

OTTAWA (Reuters) - Canada's economy unexpectedly lost jobs in March, although a surge in full-time employment reflected solid growth and did little to change expectations that the central bank will hike interest rates later this year.

Statistics Canada reported on Friday net job losses of 1,500 in the month, the first decline since September and compared with expectations for a gain of 26,500 jobs.

Statscan considers any net gain or loss in jobs of less than 28,700 to be negligible. The average monthly job growth over the previous five months was 40,000, although gains in February were also tepid at 15,100.

The unemployment rate dropped in March to 7.7 percent from 7.8 percent, as expected, as fewer Canadians were actively looking for work.

Some of the details of the report were upbeat, suggesting a better quality of jobs being created as economic growth picks up speed. Employers added some 90,600 full-time workers to their payrolls, offset by a loss of 92,100 part-time jobs. Private-sector employment also grew while government jobs were on the decline.

"The headline unemployment result is a bit of a shocker but you don't have to dig too far beneath the headline to realize there's quite a bit more strength here than the overall number would suggest," said Doug Porter, deputy chief economist at BMO Capital Markets.

"I think the Bank (of Canada) will look through that pretty quickly and it probably won't have a big impact on the bank," he said.

The Canadian dollar weakened immediately after the data to as low as C$0.9584 to the U.S. dollar, or $1.043, in what analysts called a knee-jerk reaction. The currency then strengthened to C$0.9532 after digesting the details of the report.   Continued...