Unemployment Rate Rises To 6.8% In February After Net Loss Of 1,000 Jobs

OTTAWA — The consequences of the global oil slump have started to seep into the country's labour market, washing away jobs in crude-rich provinces and pushing up the national unemployment rate.

 

The jobless rate hit 6.8 per cent last month as oil-producing provinces like Alberta showed their first significant loss of jobs since crude prices began to plummet late last year, revealed labour data released Friday by Statistics Canada.

 

The agency said the unemployment rate crept up from its 6.6 per cent mark in January, even though the report only registered a small, month-to-month net loss of 1,000 jobs. The workforce grew by 49,200 people last month, but so did the number of unemployed — by 50,200.

 

The data was released at a time of added scrutiny on the economic impact of low oil prices, which is expected to chew billions from provincial and federal coffers. 

 

The fall in crude prices also led the Bank of Canada to cut its trend-setting interest rate in January and forced Ottawa to delay its budget until at least April to give it time to assess the extent of the fallout.

 

Alberta, the heart of Canada's oil sector, suffered the biggest blow of any province on the job front.

 

The province lost 14,000 net jobs last month and saw its unemployment rate surge by 0.8 percentage points to 5.3 per cent — its highest level since September 2011.

 

The agency said Alberta's natural resources sector alone shed 7,000 net positions — most of them in support activities for mining, oil and gas. The industry shed 16,900 positions overall from coast to coast.

 

The natural resources industry in neighbouring British Columbia also failed to emerge unscathed in February, losing 7,200 net jobs. B.C.'s unemployment rate rose to 6.0 per cent from 5.6 per cent.

 

Across the country in another oil-producing province — Newfoundland and Labrador — the natural resources industry gained 700 net jobs last month. But the province lost 3,000 net jobs overall and its unemployment rate climbed to 12.6 per cent from 11.4 per cent.

 

Many economists had been expecting to see the negative effects of the oil-price plunge surface in the February data.

 

"The issue going forward is will sectors like manufacturing be more effective in terms of tempering this weakness in natural resources?" RBC assistant chief economist Paul Ferley said after the release of the labour force survey.

 

The February reading, however, for the manufacturing sector was worse than expected, Ferley said.

 

The report registered a net loss of 19,900 jobs in manufacturing, with most of those losses concentrated in Alberta and Ontario.

 

Ferley predicts the industry will add jobs in the coming months thanks to expected benefits from lower oil prices, which have helped weaken the Canadian dollar and strengthen the U.S. economy.

 

He said the survey suggested the shift could already be underway in manufacturing-heavy provinces like Ontario and Quebec, where the unemployment rates held steady last month at 6.9 per cent and 7.4 per cent respectively. Ontario added 13,800 net jobs last month and Quebec saw a net gain of 16,800.

 

In Manitoba, meanwhile, the jobless rate fell to 5.6 per cent from 6.0 per cent.

 

The February unemployment rate came in higher than the 6.7 per cent consensus projection of economists, who had also predicted a net loss of 5,000 jobs, according to Thomson Reuters.

 

The report also showed that 34,000 net full-time jobs were added in February, while 34,900 net part-time positions were lost.

 

Youth unemployment shot up to 13.3 per cent in February from 12.8 per cent the previous month. The economy also lost of 29,000 net jobs in the private sector, while it registered a net gain of 24,300 jobs in public-sector positions.

 

"Overall this wasn't good news for the Canadian economy, but news that was largely expected," CIBC chief economist Avery Shenfeld said.