By Promit Mukherjee
OTTAWA, March 13 (Reuters) – Canada’s economy unexpectedly lost a net 83,900 jobs in February, while the unemployment rate rose to 6.7% as job losses occurred across both the services and goods sectors, Statistics Canada data showed on Friday.
A dip in the number of jobs this high was last observed almost 17 years ago if the months of lockdown during the pandemic are excluded, StatsCan said.
The result missed analysts’ expectations of a job gain of 10,000 and an unemployment rate of 6.6%. In the previous month, the economy lost 24,800 jobs and the jobless rate was down to a 16-month low of 6.5%.
Canada’s labor market has failed to add any substantial jobs in the last few months as economic growth sputtered owing to a range of tariffs from President Donald Trump across critical sectors such as steel, autos, lumber and copper.
With the job losses of January and February, the economy has shed a total of 109,000 jobs, coming close to offsetting the massive gains of 189,000 jobs seen between September and December.
While the knock-on effects from these sectors have largely been contained, the Bank of Canada and economists have warned of more job losses as companies hold back investments and announce layoffs.
Employment among youth, which is usually always weaker than the core-aged people between 25 and 54 years, dipped to 14.1% in February, close to the highest level seen in September last year, StatsCan said.
In February, even the core-aged group witnessed a decline in employment by 37,000 people, highest since August last year.
The drop was led by a 108,400 jobs drop among full-time workers in February and 72,600 jobs lost in the private sector. Government jobs also declined by 17,100 last month.
In a blow to BoC’s efforts to keep inflation low, the average hourly wages of permanent employees – a gauge closely tracked by Canada to determine inflationary trends – rose by nine percentage points to 4.2%, highest since October 2024.
Goods-producing sector, which comprises some of the top sub-sectors highly exposed to the U.S. tariffs, lost 27,900 jobs, while the usually resilient services sector posted a bigger decline of 56,200 jobs, StatsCan said.
The Canadian dollar weakened 0.4% to C$1.3693 against the U.S. dollar, or 73.03 U.S. cents. Yields on the two-year government bonds were down 4.7 basis points to 2.621%.
(Reporting by Promit Mukherjee; Editing by Dale Smith and Nick Zieminski)
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