Jobless rate unexpectedly rises in November

Fri Dec 2, 2011 10:16am EST
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By Louise Egan

OTTAWA (Reuters) - Canada's economy unexpectedly lost jobs for a second straight month in November, raising concern that weakness in other countries may do lasting harm to an economy that has so far been surprisingly robust.

Net job losses totaled 18,600 jobs in the month following a hefty 54,000 drop in October, Statistics Canada said on Friday, pointing to a poor economic performance in the final quarter of the year.

That pushed the unemployment rate back up to 7.4 percent, the highest level since June, from 7.3 percent in October.

It also raised the specter that Canada is entering a period of high joblessness similar to that seen in the United States, perhaps forcing the government to reopen its stimulus program. The figures will also encourage the Bank of Canada to keep interest rates on hold at its rate announcement on Tuesday.

Analysts surveyed by Reuters had forecast, on average, a gain of 19,100 jobs in November with the unemployment rate holding steady.

"What's a bit troubling with this number is that it's now the second month in a row of job losses in Canada and totals over 72,000 in the last two months. The trend looks to be reversed," said Blake Jespersen, director of foreign exchange sales at BMO Capital Markets.

"If we see a third job loss in a row, I think that is very troubling for Canada," he said.

The Canadian dollar weakened to C$1.0131 against the greenback, or 98.71 U.S. cents, from around C$1.0089 versus the U.S. dollar, or 99.12 U.S. cents, just before the data. It recovered briefly before turning downward again.   Continued...