Canada loses 2,300 jobs in February
Jobless rate ticks up to 7.3% in February as Canada loses 2,300 jobs
CBC News Posted: Mar 11, 2016 5:00 AM ET Last Updated: Mar 11, 2016 8:38 AM ET
Economists expected Statistics Canada to reveal on Friday that the Canadian economy added about 8,500 jobs last month.
Economists expected Statistics Canada to reveal on Friday that the Canadian economy added about 8,500 jobs last month. (David Moir/Reuters)
Canada's economy lost an unexpected 2,300 jobs in February and the jobless rate ticked up to 7.3 per cent, Statistics Canada said Friday.
The data agency said the unemployment rate is now at its highest level in almost two years, dating back to March 2013.
British Columbia added jobs during the month, while three provinces — Saskatchewan, New Brunswick and Prince Edward Island — lost. The other provinces saw little change in their employment numbers.
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Canada's dollar and benchmark stock index have quietly rebounded since bottoming out in January, but today's jobs number could be some of the best evidence in weeks to answer the question of whether a modest recovery underway in Canada's economy can really last.
Waylaid by weak oil and other factors for more than a year, the bottom fell out from under the loonie and the TSX in January, with the dollar hitting a 13-year low of 68.68 cents US on Jan. 18, and the TSX slumping to its lowest point since 2013 two days later.
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Since then, however, both have staged mini rallies of better than 10 per cent, and the Bank of Canada has modestly hiked its expectations for how the economy will perform this year. All of which has happened despite a relative dearth of hard economy data to back up the muted optimism.
Friday could change all that, however, as Statistics Canada is set to release data on the number of jobs created — or lost — in February.
"This jobs number will be pivotal," said Scott Smith, senior market analyst at Cambridge Global Payments in Toronto. Monthly employment numbers can be notoriously volatile and, in recent months, wildly different from region to region. January's number showed a loss of almost 6,000 jobs, but that headline figure belies what's happening across the country.
A tale of 2 economies
Ontario actually added 20,000 jobs during the month, while Alberta lost about half as much and saw its unemployment rate tick up to the highest level in 20 years, at 7.4 per cent.
After an energy-driven downturn, Smith sees reasons for cautious optimism, and hopes Friday's number may manage to inspire a little confidence in an economy that sorely needs it. "We're not likely to see a barn burner, but even a slightly positive number is definitely positive for the economy."
Nick Exarhos agrees. The chief economist for CIBC said the situation in January was one where expectations were a lot lower than they deserved to be, and that always causes people to panic. Back then, the talk was of a 59-cent dollar, for example, a theory that was built on weakness in the rest of the global economy that hasn't come to pass.
"Equity markets and financial markets in general were pricing in a very dire financial situation for the global economy," Exarhos said.
That just hasn't been the case. While Canadian market watchers haven't had a lot of clear positive numbers to digest, the U.S. job market, for example, added 242,000 jobs in February. And policymakers in China and Europe have made it clear they will take steps to ensure their respective economies don't fall into recession.
Exarhos noted that the Canadian economy beat the Bank of Canada's projections at the end of 2015, and thus far is on track to do the same in the first quarter this year. "It's still lacklustre," he said, "but against even weaker expectations."
The consensus view for Friday, among 19 economists Bloomberg tracks who give projections for the jobs number, is that the Canadian economy will have added about 8,600 jobs last month.
As economist Brian DePratto put it when January's GDP data came out: "The first quarter of this year is unlikely to be a barn burner for the economy, but solid momentum heading into the year suggests that we are likely to see an uptick."
In a world of lowered expectations, even a slight uptick might be enough to inspire confidence among investors and job seekers. Given that gloomy backdrop, good news on Friday might just be the absence of bad.
"We put out a report suggesting investors take a chill pill, and it looks like that's what they've taken," Exarhos said.
