Canada lost 5,700 jobs in January and the unemployment rate edged up to a two-year high of 7.25%, 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%. It last hit 7.2% in December 2013.
Statistics Canada said on Friday that in the year to January, employment increased by an anemic 125,500 jobs, or 0.7%.
"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 jobless rate in the energy-producing province of Alberta rose to 7.4%, the highest since February 1996. January marked the first month since December 1988 that the Alberta unemployment rate exceeded the national rate.
The Bank of Canada last month decided not to cut interest rates but admitted it was not an easy call, as concern about a rapid decline in the 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 Canada macro strategist at TD Securities.
The Canadian dollar weakened on the data, touching C$1.3785 to the U.S. dollar, or 72.54 U.S. cents.
The six-month moving average for employment growth was 8,900, down from 10,700 in November.
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%.
Analysts polled by Reuters had forecast a deficit of C$2.2 billion. Statscan said imports grew 1.6 % after three consecutive monthly decreases.
Exports to the United States, which accounted for 74.8% of Canada's global total in December, grew 2.9 percent while imports grew 1.3%. As a result, Canada's trade surplus with the United States swelled to C$3.19 billion from C$2.63 billion in November.
Canada posted a record C$23.32 billion trade deficit in 2015. (Reuters)
Source: www.businessworld.ie
