Canada Unexpectedly Loses Jobs

Posted on October 8/2010 by

OTTAWA — The Canadian economy lost 6,600 jobs in September, Statistics Canada said Friday, as the country’s recovery faltered after an initially strong rebound from recession.

The jobless rate declined to eight per cent during the month, from 8.1% in August, “as fewer people, particularly youth, participated in the labour market,” the federal agency said.

Economists’ forecasts had ranged from 10,000 to 12,500 new jobs last month, following a gain of 35,800 in August, with the unemployment rate staying at 8.1%.

Canada’s gross domestic product declined in July for the first time in almost a year Statistics Canada said Thursday the economy shrank 0.1 per cent during the month.

The July data marked the first monthly contraction since August 2009, when GDP shrank 0.1%. That had been the only month to show a decline in economic activity since a 10-month string of reduced GDP readings between August 2008 and May 2009.

The Bank of Canada had anticipated 3.5% growth this year and 2.9% in 2011, although those projections are expected to be revised downward when the central bank releases its updated economic outlook on Oct. 20.

That slower growth has put into question any further interest rate hikes by the Bank of Canada.

The central bank has raised in recent months its trendsetting interest rate from a record low 0.25% to its current level of one per cent. The bank’s next policy meeting is Oct. 19.

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