During January, the Canadian economy shed 21,900 jobs after two months of increases. The loss was largest in education and manufacturing jobs.
In spite of the loss of jobs, the unemployment rate in Canada has actually fallen even further to 7%. In December. the rate was at 7.1% which was also a decrease from the month before. These seeming contradictory movements are caused by many Canadians simply no longer seeking jobs and leaving the labor market for various reasons.Statistics Canada reports that 57,500 people stopped looking for jobs. This is over twice as many as there were lost jobs allowing the unemployment rate to decline.
Canadian housing starts also declined from 197,118 in December to 160,577 in January. On the employment front, Ontario and British Columbia registered declining employment while Alberta, Saskatchewan and also New Brunswick had increases. The construction industry was improving with 17,000 jobs added during January.
Doug Porter, the chief economist at BMO Capital Markets, said:
Many jobs that were lost were in the public sector which lost 27,000 jobs. Compared with January of 2012, the number of private sector employers was 1.9% higher while the number of public sector and self-employed remained relatively the same. Over an entire year, Statistics Canada reports that employment had increased 1.6% or by 286,000 in full time work. The number of hours worked on average also increased by 1.7%.
"Combined with the steep drop in housing starts as well as the still-wide trade deficit, the jobs report rounds out a day of infamy for Canadian economic stats. To some extent, the drop in jobs appears to be a payback for the surprising strength in the second half of last year, and would normally be little cause for concern. However, with housing softening notably, and consumers and governments not in much mood (or ability) to spend, the economy will need a major helping hand from a stronger U.S. performance in the year ahead to help generate renewed job gains."