In February, the Canadian economy ‘unexpectedly’ lost 83,000 jobs, the most since January 2022 (shown below since 2020), driving the unemployment rate up to 6.7% after a 25,000-job loss in January. Economists surveyed had expected employment to rise by 10,000 and the jobless rate to be 6.6%.
Employment declines were widespread and across both goods and services industries, with the private sector losing 72,600 jobs, and employment falling by 17,100 in the public sector. A 108,400 decrease in full-time employment was partially offset by a 24,500 gain in part-time work.
While Canadian stock prices are now negative on the week and month, bond prices surged on the belief that the Bank of Canada may now cut rates more than previously predicted. See, Canadian Bonds Surge After Economy Loses Most Jobs Since 2022:
“This is a pretty bad report,” Brendon Bernard, economist at Indeed Canada, said on BNN Bloomberg Television. “Everything is coming out pretty soft and we’re seeing declines across a range of sectors.”
The losses suggest the labor market remains soft as the economy bears the weight of US tariffs and an upcoming review of the US-Mexico-Canada Agreement looms over businesses.
…The loonie extended the day’s losses after the release of the jobs report, falling 0.4% to C$1.369 per US dollar.
While the data point to mounting economic slack, policymakers must also account for higher oil prices stemming from the ongoing conflict in the Middle East, which are likely to boost inflation at least in the near term. These are tough conditions for policymakers to navigate.
