Sunday, March 9, 2014
By GREG QUINN / Bloomberg News
OTTAWA — Canada's biggest employment loss since the recession four years ago and an unexpected trade deficit underscore how the world's 11th largest economy is being hobbled by weak global demand.
The drop of 54,500 jobs reported Friday by Statistics Canada offset a 50,700 gain in February, and lifted the unemployment rate to 7.2 percent from 7 percent. The merchandise trade deficit for February was the 11th in a row, marking the longest streak in records dating to 1988.
Bank of Canada Gov. Mark Carney has said a rebound in exports and business investment will lead growth through next year as consumers struggle with record debt loads. The country's currency fell the most on an intraday basis in nine months on Friday's figures, coupled with a weaker-than-expected U.S. job report that suggested continued weakness in the country that buys three-quarters of Canada's exports.
"In the Canadian numbers there was no silver lining whatsoever," said Avery Shenfeld, chief economist at CIBC World Markets in Toronto. "We aren't yet getting enough lift to exports, as today's data shows, to compensate for a much less exciting domestic housing market."
The report brings the labor market more in line with other parts of the economy, where output growth slowed to a 0.6 percent annualized pace in the fourth quarter and inflation has lagged the central bank's 2 percent target since May.
"As bad as the headline was, there wasn't much below the surface to make it better," Robert Kavcic, senior economist at Bank of Montreal, said by telephone from Toronto. "We were pretty suspicious with what we had seen in the last four months," he said, referring to improvements in the job market.
Full-time employment fell by 54,000 in March while part-time work declined by 400 positions, according to the report from Ottawa-based Statistics Canada.
Private companies cut 85,400 workers and public-sector employment fell by 7,700. Workers designated as employees by Statistics Canada fell by 93,100 while self-employment increased by 38,700.
Accommodation and food service fell by 24,900 jobs in March, followed by cuts of 24,300 in public administration and 24,200 in manufacturing.
A.O. Smith Corp. said April 3 it will close a residential water heater plant in Fergus, Ontario, with 350 workers. The Milwaukee-based company said in a statement the industry was "burdened with overcapacity for a number of years," adding "we have been facing a challenging economic environment as a Canadian manufacturer."
The U.S. employment report for March was also weaker than forecast, with Labor Department figures showing payrolls rose by 88,000, less than half the amount forecast by economists in a Bloomberg survey.
Canada's February trade deficit of $1 billion followed a January figure that was revised to $745 million from $236 million, Statistics Canada said Friday in Ottawa.
Economists surveyed by Bloomberg had forecast a $99 million surplus, as well as an employment gain.
"The government is concerned about the jobs numbers released today," Public Works Minister Rona Ambrose told reporters in Toronto today, where she rang the opening bell at the stock exchange.