February 5, 2010 / 12:46 PM / 8 years ago

Canada's jobless rate unexpectedly drops in January

OTTAWA (Reuters) - Canada’s unemployment rate fell to 8.3 percent in January, its lowest rate since September, from 8.4 percent in December as the economy added 43,000 jobs, Statistics Canada said on Friday.

<p>The Bay Street sign is pictured in the heart of the financial district as people walk by in Toronto, May 22, 2008. REUTERS/Mark Blinch</p>

Economists surveyed by Reuters had predicted an unemployment rate of 8.5 percent and an increase of 15,000 jobs.

Almost all of the new jobs were part-time, to some extent reflecting the first notable increase in youth employment since the fall of 2008. The youth jobless rate fell to 15.1 percent from 16.0 percent.

Bank of Canada Governor Mark Carney said on Thursday he would be looking carefully at the labor market in crafting monetary policy. Canada’s unemployment rate has been more than 1-1/2 percentage points less than the U.S. figure.

The Canadian dollar rose as high as C$1.0716 or 93.32 U.S. cents, from C$1.0749, or 93.03 U.S. cents just before the report, but BMO Capital Markets deputy chief economist, Doug Porter, said there was less than meets the eye in the report.

“I don’t think there’s a big shock here for the Bank. The fact the unemployment rate is grinding lower will be notable, but I don’t think it’s enough to put the Bank on high alert by any means,” he said.

Aron Gampel, deputy chief economist at Scotiabank, saw the data as positive even though he said the gains weren’t as broad-based as hoped.

“The issue here is that the Canadian economy is slowly but surely gaining momentum. It would be much stronger if not for the fact that the trade side remains a drag at a time when domestic demand is doing extremely well,” he said.

The increase in employment follows a decline of 28,300 jobs in December, a figure that was revised from a loss of 2,600 to reflect new statistical methods. Employment was down only 16,000 from a year ago but remains 280,000 below the level of October 2008, before the economic crisis began.

The largest rise in January, at 53,700, was among private-sector employees. The month saw 13,400 more public-sector employees, while self-employment dropped by 24,000.

Manufacturing has taken the brunt of the employment cuts during the recession. The sector lost another 15,700 jobs in January and stood 95,200 below a year earlier.

Additional reporting by Scott Anderson, Euan Rocha and Ka Yan Ng in Toronto; Editing by Padraic Cassidy

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