Canadian economy lost 63,000 jobs in December

OTTAWA— Canada posted its first monthly decline in jobs since April amid tightened public health restrictions in December, and economists warn the losses are likely to continue in January as the number of new COVID-19 cases continue to rise.

Statistics Canada said Friday the economy lost 63,000 jobs in December while the unemployment rate edged up to 8.6 per cent compared with 8.5 per cent in November.

“Due to both the continuing rise in virus cases to open the new year and the further curtailments of activity since the last survey, another month of job losses could be on the horizon in January,” CIBC senior economist Royce Mendes said.

“The weak jobs report, combined with the recent appreciation of the Canadian dollar, will put pressure on the Bank of Canada to ease monetary policy further.”

Statistics Canada said its report was a snapshot of labour market conditions for the week of Dec. 6 to 12. It noted that additional public health measures were put in place in many provinces after that period and would likely to be reflected in its January labour force survey results.

TD Bank senior economist Sri Thanabalasingam said the resurgence of the virus is hitting Canada hard.

“Sharp increases in caseloads and hospitalizations are leaving provinces with little choice but to impose or prolong restrictions on an economy that is but a shadow of itself,” Thanabalasingam wrote in a report.

Mendes noted that when the restrictions began to ease last spring and summer, the rebound in the economy came quickly.

“The good news is that last summer we saw a pretty sharp snapback at a time when virus cases were low … so that should give people some optimism that after this rough patch is hopefully behind us, the economy can bounce back quite well in the short-term,” he said.