OTTAWA (Reuters) - Canada unexpectedly shed jobs last month, pushing the unemployment rate to a nearly three-year high due mainly to a loss of full-time positions, Statistics Canada said on Friday, but some economists were skeptical of the underlying factors.
Although February’s decline stemmed from the loss of 51,800 full-time positions, economists said the large drops in healthcare and educational services were probably anomalies. The report can be volatile month-to-month.
After paring some gains just after the report, the Canadian dollar recovered to hit a four-month high against the greenback. The figures did not alter expectations that the Bank of Canada would hold rates steady at its next meeting in April.
The labor market in Ontario, Canada’s most populous province, was hit particularly hard, with a loss of 48,900 full-time jobs.
“It is pretty tough to see why Ontario would have lost almost 50,000 full-time jobs in a single month,” said BMO Capital Markets Chief Economist Doug Porter, adding he was skeptical of that element of the report.
Overall, Canada lost 2,300 jobs in February, missing expectations for a gain of 9,000. The decline in full-time work was tempered by the addition of 49,500 part-time jobs.
The unemployment rate rose to 7.3 percent, its highest since March 2013.
“I think it is just more of the same that we’ve seen from the Canadian employment numbers in the last year, just a slightly different tinge to it,” Porter said.
Oil-sensitive Alberta added a meager 1,400 jobs, but an increase in people looking for work sent the unemployment rate up to 7.9 percent there, its highest since August 1995.
Separate Statscan data showed Canadian household debt rose to a record 165.4 percent of income in the fourth quarter. The statistics agency said disposable income grew more slowly than borrowers took on debt.
Household credit market debt, which includes consumer credit, mortgages and other loans, rose, with mortgages making up the bulk of debt outstanding. Over 2015, mortgages surged 6.3 percent, their strongest growth since 2011.
Years of low borrowing costs have encouraged Canadians to take on more debt as the Bank of Canada has been forced to keep interest rates low to support the economy. The central bank cut interest rates twice last year.
Additional reporting by Andrea Hopkins and Matt Scuffham in Toronto; Editing by Lisa Von Ahn