OTTAWA (Reuters) - Canada lost 5,700 jobs in January and the unemployment rate edged up to a two-year high of 7.2 percent, in part because of further job losses in the oil-producing province of Alberta, underlining the economy's struggles with weak energy prices.
Analysts polled by Reuters had forecast a gain of 5,500 positions and for the unemployment rate to stay at 7.1 percent. It last hit 7.2 percent in December 2013.
Statistics Canada said Friday that in the year to January, employment increased by an anemic 125,500 jobs, or 0.7 percent.
"Overall, the story is the economy is struggling to grow and it is struggling to produce much in the way of employment," said BMO Capital Markets chief economist, Doug Porter.
The Alberta jobless rate rose to 7.4 percent, the highest since February 1996. January marked the first month since December 1988 that the Alberta rate exceeded the national one.
The Bank of Canada last month decided not to cut interest rates but admitted it was not an easy call, as concern about the weaker currency clashed with an economic slump.
In January, the economy created 5,600 full-time jobs and lost 11,300 part-time positions.
"We're looking at something that is vaguely consistent (with) a slower pace of hiring, which makes perfect sense, given the conditions in the wider economy," said David Tulk, chief TD Securities Canada macro strategist.
The Canadian dollar weakened on the data, touching C$1.3785 to the U.S. dollar, or 72.54 U.S. cents.
While the weak dollar is hitting jobs, it is also helping Canada's exporters.
The trade deficit unexpectedly shrank to C$585 million ($424 million) in December from C$1.59 billion in November as exports jumped by a healthy 3.9 percent.
Analysts polled by Reuters had forecast a deficit of C$2.2 billion. Imports grew 1.6 percent.
Exports to the United States, which accounted for 74.8 percent of Canada's global total in December, grew 2.9 percent while imports grew 1.3 percent. As a result, Canada's trade surplus with the United States swelled to C$3.19 billion from C$2.63 billion in November.
While Canada posted a record C$23.32 billion trade deficit in 2015, the volume of exports actually rose by 4.0 percent. The volume of imports advanced by 1.1 percent.
Separately, the pace of purchasing activity in Canada surged in January, pulling out of a minor contraction in December, the Ivey Purchasing Managers Index showed.
Editing by Jeffrey Benkoe and Bernadette Baum