Canada’s unemployment rate fell slightly to 7% in January, from 7.1% the previous month, Statistics Canada reported Friday. However, the agency said the economy lost 21,900 jobs during the month. Economists had expected a small gain of about 5,000 jobs.
According to experts at RBC Economics, "the pullback followed five months of above-average increases which served to temper the blow from January's sharp drop." The labour force dropped by 57,500.
Regionally, Ontario posted a 31,000 decrease in employment in January, clawing back some of the 55,000 jobs created in November/December. Ontario's unemployment rate fell to 7.7%, however, as the labour force contracted. BC also saw job losses in January totaling 16,000.
Employment in Alberta rose by 9,700 and the unemployment rate held steady at 4.5% as the labour force in the province expanded by a similar amount. Saskatchewan's unemployment rate fell by 0.6 percentage points to 4.0% on the back of a 7,300-unit increase in employment.
The bank report affirms that, "the downshifting evident in today's report was expected given the tepid pace of economic growth in the second half of the 2012. If anything the fact that the labour market continued to power along when the economy was growing at a less than 1% pace in the second half of 2012 seemed out of whack.
"That being said, the easing in the downside risks to the global economy evident in recent weeks, very low interest rates and supportive financial conditions are expected to push the economy into a higher gear in early 2013 consistent with the unemployment rate gradually declining to 6.7% by the end of 2014."
