Canada suffers biggest job loss in nine years

The net loss of 88,000 jobs across Canada last month and the stock-market sell-offs came as jolts after a banner 2017 for both the labour and stock markets, economists said.
The net loss of 88,000 jobs across Canada last month and the stock-market sell-offs came as jolts after a banner 2017 for both the labour and stock markets, economists said. (Alan Diaz / The Associated Press file photo)

Dismal Canadian job numbers Friday capped off a week of rough financial news, including jaw-dropping volatility on stock markets in Canada and around the globe.

Statistics Canada reported record part-time job losses in January that gave Canada’s labour market its biggest one-month drop since the last recession in 2009 — after which stock markets began their bull run.

The loss of 137,000 part-time positions was led by Ontario, which hiked its minimum wage by 20 per cent on Jan. 1.

A tumultuous week of trading continued Friday, with Toronto’s TSX off more than five per cent since last week and 8 per cent from its all-time high.

Both the net loss of 88,000 jobs across Canada last month and the stock-market sell-offs — the Dow Jones industrial average and the S&P 500 stock index have both tumbled more than 10 per cent from all-time highs reached just two weeks ago — came as jolts after a banner 2017 for both the labour and stock markets, economists said.

The job market collapse in January marked the first decline since July 2016, and ended the longest stretch of gains since 2000.

“Canadian employment suffered its first setback in 16 months in January — and it was a hefty one,” said BMO chief economist Douglas Porter. He said Ontario was notably soft, with a drop of 50,900 jobs — all in part-time, and a record for the province. The biggest declines were in retail and wholesale trade, “although there is no way one can draw a straight line from the (wage) hike to one month’s job move,” Porter said in a research note.

He noted that harsh weather in January also appeared to have hit employment in the province’s construction sector (down 14,900 jobs) and transportation industry (down 5,900 jobs).

On the flip side, Statistics Canada reported the Canadian economy generated 49,000 full-time positions last month. While the overall decline helped push the national unemployment rate up to 5.9 per cent in January from 5.8 per cent the previous month, it’s still well below the 6.7 per cent it sat at a year ago.

“Overall, a mysterious mix of good and bad, with the latter’s impact blunted by how strong job gains were in the lead-up to these figures,” CIBC chief economist Avery Shenfeld wrote in a research note to clients.

Ontario’s Economic…

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