Canada / Employment decreased slightly and unemployment rate down 0.1 percentage points to 7.0% but …

Following two months of gains, employment decreased slightly in January (-22,000). A decline in the number of people looking for work pushed the unemployment rate down 0.1 percentage points to 7.0%.

Chart 1 Employment

Compared with 12 months earlier, employment increased by 1.6% or 286,000, all in full-time work. Over the same period, the total number of hours worked rose 1.7%.

In January, employment declined in Ontario and British Columbia. At the same time, there were increases in Alberta, Saskatchewan and New Brunswick.

Public sector employment fell by 27,000 in January, while self-employment was up slightly and the number of private sector employees was little changed. Compared with 12 months earlier, the number of private sector employees increased by 1.9% or 210,000, while the number of public sector employees and self-employed was little changed.

There were fewer workers in educational services and manufacturing in January, while employment rose in construction and public administration.

After gains in recent months, employment among men aged 25 to 54 declined in January. Employment rose among men aged 55 and over and edged up among youths.

Chart 2 Unemployment rate

Chosen excerpts by Job Market Monitor from

via The Daily — Labour Force Survey, January 2013.

Canada jobs plunge: What the economists say

After two months of hefty gains Canada’s economy unexpectedly shed 21,900 jobs in January, almost entirely in full-time work, according to Statistics Canada data released on Friday.

Here’s what the analysts say:

DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS

“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.”

MICHAEL GREGORY, SENIOR ECONOMIST, BMO CAPITAL MARKETS:

“Bit of a surprise, as I look at the detail there is weakness in manufacturing, which seems like a ripple effect of the strong Canadian dollar, but we still had gains in construction, which was interesting. The bottom line is that after five months of solid average job gains you have a little bit of payback this month. The labor force also shrunk, so the unemployment rate is down to 7% which is a mixed blessing. I think this number has to be taken in the context of what has happened in the months before, so the underlying trend is probably more reflective now of the overall economy. We had a sluggish performing economy – nowhere near the mid-30,000 job growth we’ve had over the last five months. And now that trend has come down, which should be fully expected.”

“The Bank of Canada was of the view that the Canadian economy was underperforming and this is consistent with that. I think there are no implications at all for monetary policy.”

“We will see a little weakness from the currency – it is a weak number. Offsetting that is a little better improvement in the merchandise trade deficit. But overall I think this will be taken negatively. The first thing I heard from my traders is ’Canada will never ever raise rates again,’ so I think it does take a little bit of luster off the currency.”

Chosen excerpts by Job Market Monitor from

via Canada jobs plunge: What the economists say | Economy | News | Financial Post.