Canada jobless rate rises to 7.6%

Ottawa: Canada's unemployment rate rose to a nine-month high in January as the trend of sluggish job creation that began in the second half of last year continued.

The jobless rate rose to 7.6 per cent from 7.5 per cent as employment increased 2,300 last month, Statistics Canada said Friday in Ottawa. Economists surveyed by Bloomberg News had forecast unemployment to stay at 7.5 per cent and 22,000 jobs to be added.

Consumers will account for more than half of Canada's 2 per cent economic growth this year, according to the Bank of Canada, as weak global demand and a high dollar curb exports. Most of the past year's job growth came in the first six months of that period, Statistics Canada said, which suggests consumer spending growth may be restrained.

"It will weigh against a Bank of Canada rate increase anytime soon, and suggests the Canadian consumer could continue to pull back, not just in the face of elevated debts but also because of weaker job growth," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto.

The Canadian report contrasted with US figures, which showed payrolls increased by 243,000 in January, bringing the US jobless rate down to 8.3 per cent, its lowest in three years. Canada's jobless rate has been below that of the US since October 2008, and the gap between the two rates is the narrowest since April 2009.

The Canadian currency appreciated 0.6 per cent to 99.34 cents per US dollar in Toronto and reached 99.28 cents, the strongest since October 31. One Canadian dollar buys $1.0066. It touched 99.28 cents, the strongest since October 31. The yield on the 2-year government bond rose 5 basis points to 1.04 per cent.

Manufacturing jobs

Manufacturing employment has fallen by 2.5 per cent in the 12 months through January and by 21 per cent over the last decade. Canada's strong dollar makes the country's goods less competitive.

Part-time employment rose by 5,900 in January while full-time jobs decreased by 3,600. Workers classified as employees rose by 39,200 and self-employed workers decreased by 37,000, Statistics Canada said.

Private-sector employment increased by 19,700 and public-sector jobs rose by 19,600.

Canada's job gain was led by a 22,800 increase in education and another 18,800 in information, culture and recreation.

The biggest job decline was 44,800 in professional, scientific and technical services. Employment in finance, insurance real estate and leasing declined for a fifth month, by 23,200, bringing the 12-month drop to 49,700.

"These figures are consistent with an economy fighting to keep its head above water," said Toronto-Dominion Bank deputy chief economist Derek Burleton.

Average hourly earnings of permanent employees rose 2.2 per cent in January from a year earlier. The Bank of Canada says that figure is a key indicator of inflation.

Central bank Governor Mark Carney kept his benchmark lending rate at 1 per cent last month, prolonging the longest pause since the bank began using it as a policy measure in 1994.