Canadian economy drops 54,500 jobs in March, wiping out previous month’s gain

Canada experienced the worst jobs performance in almost four years last month as 54,500 full time, private sector positions disappeared—an unexpectedly big drop that erased a gain in February.

The loss was the biggest since February 2009, and along with a small retreat in the number of Canadians looking for work, helped lift the unemployment rate two-tenths of a point to 7.2 per cent.

Economists had expected a weak March to even out the above-trend gains of February, but few saw such massive bleeding, leaving the country with about 26,000 fewer jobs than at the beginning of the year.

To make matters worse, all the pay-back was in the full-time category.

The losses in the economically important private sector were mammoth—with 85,400 workers joining the ranks of the unemployed.

The only gain was in the less desirable self-employment category, where almost 39,000 Canadians created their own employment, likely an indication many could not find permanent work.

Over the past 12 years, only about half the 203,000 jobs created have come in the private sector.

The latest numbers—and particularly the longer-trend three-month record—suggests the economy is still struggling to find lift following the stall that occurred in the second half of 2012, when growth averaged only about 0.7 per cent. January’s gross domestic product did advance 0.2 per cent, but some other indicators have been soft, including housing.

Also on Friday, Statistics Canada reported that the country’s trade deficit widened to $746 million as exports decreased by 0.6 per cent.

Canada’s dollar fell after the Statistics Canada reports, dropping to 97.96 cents US—more than three-quarters of a cent below the Thursday closing price.

The Bank of Canada has projected growth in the first quarter of this year to reassert itself with a forward momentum of over two per cent, but the trade figure and jobs record suggest that is now unlikely to occur. For the year, the central bank sees growth averaging two per cent, although the economic consensus used by Finance Minister Jim Flaherty in last month’s budget was more modest at 1.6.

The biggest shock in March was the 85,400 loss in private-sector jobs, bringing the gain in the important sector to 111,000 for the past year, or only a one per cent increase.

By industry, the biggest losers were manufacturing, which shed 24,200 workers; accommodation and food services, which declined by 24,900; and public administration, down 24,300. Construction was also down by almost 10,000.

There gainers were few and far between. The most notable was a 12,100 increase in finance, insurance and real estate, and a 10,300 gain in the professional, scientific and technical services category.

Regionally, employment fell in six of the 10 provinces, with Ontario and Quebec leading that way, each shedding about 17,000 workers. Even Alberta, one of the country’s stronger performers, lost 11,300 jobs and in British Columbia, employment fell by 14,800. Nova Scotia registered the only notable increase relative to its population with a pick-up of 2,900 jobs.

—The Canadian Press