Canada’s economy shed 22,000 jobs in January, but a corresponding drop in the number of unemployed people looking for work caused the jobless rate to also drop, to seven per cent.
Statistics Canada said the jobless rate ticked 0.1 percentage points lower as 57,500 people stopped looking for jobs — more than enough to offset the decline in the number of jobs.
“It had to be coming,” CIBC economist Avery Shenfeld said in reaction to the news.
In the last five months of 2012, the Canadian economy cranked out an average of 37,000 jobs a month. That was against a backdrop of official GDP data that showed the economy wasn’t expanding much.
With those two data points at odds, something had to eventually give. “The only question was when,” Shenfeld said.
Most of the job losses came from the public sector, where there were 27,000 fewer positions. Self-employment rose slightly, and the private sector was largely unchanged, the data agency said.
Self-employment tends to tick higher following job losses in conventional industries, as people decide to start their own businesses.
The manufacturing sector lost 22,000 jobs, bringing total employment in that key sector down to the same level it was at a year ago. The construction industry was a bright spot, adding 17,000 positions during the month.
“Given the recent slowdown in homebuilding and ongoing public sector restraint, we do not expect the strong hiring gains in the [construction industry] to be sustained,” Scotiabank economist Derek Holt said following the release of the data.