January 08, 2010 |
|OTTAWA — Canadian job growth stalled in December, with the economy shedding 2,600 jobs and the unemployment rate remaining at 8.5 per cent, Statistics Canada said Friday. |
"In the last nine months, employment has stabilized but remains 323,000 (down 1.9 per cent) below the October 2008 peak," the federal agency said.
"In December, there were a number of offsetting changes by industry. Employment rose in health care and social assistance, as well as in professional, scientific and technical services. The largest declines were in transportation and warehousing; business, building and other support services; and public administration," it said.
Most economists had forecast job growth of 20,000 in December, although they expected the unemployment rate to be unchanged.
Last month's decline followed a hefty 79,000 increase in jobs in November.
Vincent Ferrao, Statistics Canada's labour force analyst, said "this increase held in December." However, he said employment for women aged 25 to 54 — who make up much of the workforce in the finance, insurance, real estate and public administration sectors — declined by 24,000 last month.
Still, Statistics Canada characterizes the December number as "unchanged" because the overall 2,600 loss "is not a statistically significant number," said Ferrao, adding that the employment market now shows a "stable trend."
Douglas Porter, deputy chief economist at BMO Capital Markets, said that "while a tad disappointing, today's jobs report hardly represents a serious challenge to the recovery picture. After all, it only offsets a tiny fraction of the prior month's massive gain."
"Still, it does show that the recovery will be uneven, with overall growth likely to pale compared with past recoveries," he said.
The surprisingly weak job report comes despite signs of economic recovery in Canada.
The economy edged up 0.4 per cent in the third quarter of last year — marking the official end to a recession that lasted for three consecutive quarters.
The Bank of Canada — which cut its key lending rate to a record low 0.25 per cent to spur spending — is now forecasting 3.3 per cent expansion in the final three months of 2009 and three per cent growth in 2010.
Millan Mulraine, economics strategist at TD Securities, said "it is clear that the pace of job creation is fairly consistent with the stage of the Canadian economic recovery. And with the Canadian economy appearing to be slowing pulling itself of the recession, we expect employment growth in the coming months to remain in a similar range."