Canada’s unemployment rate posted a surprise increase last month as the nation continues to struggle with the impact of lower oil prices.
The unemployment rate climbed to 7.3 percent in February, the highest since March 2013, following a 7.2 percent rate a month earlier and up from as low 6.6 percent last year, Statistics Canada said Friday from Ottawa. Employers eliminated a net 2,300 jobs, including more than 50,000 full-time positions.
The collapse of oil prices has triggered layoffs in energy- producing regions such as Alberta to Newfoundland, with Canada’s labor market staying above water only with the help of gains in British Columbia and Ontario, two provinces benefiting from robust housing markets and, in the case of Canada’s largest province, a manufacturing revival.
“Overall, we would characterize the February jobs report as the new normal for Canada’s economy,” Leslie Preston, senior economist at Toronto Dominion Bank, said in a note to investors. “Looking ahead, we expect the national unemployment rate to remain fairly steady over the next few quarters, as weakness in oil-producing provinces is offset by greater vigor elsewhere.”
The Canadian dollar initially pared gains after the report before recovering. It was up 0.8 percent to C$1.3189 per U.S. dollar at 10:54 a.m. in Toronto, reaching the strongest level since Nov. 5, as crude prices rose.
Canada’s economy has created just 30,800 jobs since August, the lowest six month total since 2014. Excluding British Columbia and Ontario, the country has lost 41,500 jobs over that time.
The February data suggest that even Ontario’s job market may be weakening. The province lost 11,200 jobs in February, including 48,900 full-time posts. Ontario’s unemployment rate increased to 6.8 percent during the month, with the job declines centered around services.
Ontario did record an increase in goods-producing jobs, including 10,700 new jobs in manufacturing. The pick-up in goods-related industries such as factories, natural resources and construction reflected a nationwide trend. Canada added 42,200 new jobs in the goods-producing sector in February, and lost 44,500 services-related jobs, many in the public sector.
Alberta’s unemployment rate rose to the highest since 1995 at 7.9 percent.
Nationally, Canada lost 51,800 full-time jobs, while gaining 49,500 part-time workers in February. Economists surveyed by Bloomberg News projected a 10,000 increase and an unchanged jobless rate, according to the median forecasts.
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