The Canadian economy unexpectedly shed 7,200 jobs in March, its first decline in seven months, Statistics Canada data showed on Friday, reinforcing market expectations that the Bank of Canada will keep interest rates unchanged next month.
The unemployment rate was unchanged at 5.8 per cent. Analysts in a Reuters poll had forecast a marginal gain of 1,000 jobs in March, following outsized gains in the previous two months, and no change in the unemployment rate.
Despite the drop in March, employment rose by 116,000 jobs in the first quarter.
“We got a little dip in employment, but the numbers are volatile and it’s been on a pretty strong run over the prior half year,” Nathan Janzen, Senior Economist at Royal Bank of Canada, told Reuters.
Analysts said the small decline in March, following months of gains, was unlikely to alter the Bank of Canada’s view of employment as a bright spot in Canada’s economy.
Bank of Canada Governor Stephen Poloz expressed guarded optimism earlier this week that Canada would emerge from a soft patch, but said the economic outlook still warrants an interest rate below the neutral range.
The central bank, which has hiked rates five times since July 2017, held rates steady last month. The next rate decision will be April 24.
The economy added 1,100 goods producing sector jobs, mostly in manufacturing, and shed 8,800 services sector jobs, mostly in healthcare and social assistance, and the business, building and other support services category.
(Reuters)
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