Canada loses 7K jobs in February, unemployment still at 7 per cent

A sign advertising jobs is seen here on College Street East in Belleville, ON., Feb. 11, 2014....

A sign advertising jobs is seen here on College Street East in Belleville, ON., Feb. 11, 2014. (EMILY MOUNTNEY/QMI AGENCY)

Louise Egan, Reuters

, Last Updated: 10:28 AM ET

OTTAWA - The Canadian economy unexpectedly lost 7,000 jobs in February, giving little reason for the Bank of Canada to change its neutral stance on interest rates after strong hiring in January had raised hopes of renewed vigor in the labor market.

Statistics Canada's employment report, released on Friday, was mixed, showing 18,900 full-time jobs were created in the month while 25,900 part-time positions disappeared. The private sector hired 35,200 new workers while the public sector shed 50,700. The services sector was hardest hit.

The unemployment rate held steady at 7.0 percent.

Analysts had forecast 15,000 new positions in the month, following a gain of 29,400 in January and a loss of 44,000 jobs in December.

The average monthly job gain dropped to 4,200 in the six months to February from 15,300 in the six months to January.

Most of the setbacks were in the services sector. Employment in health care and social assistance fell by 27,500 in the month, and 24,600 workers in finance, insurance, real estate and leasing lost their jobs in the month.

The Bank of Canada has kept its main interest rate unchanged at 1.0 percent for over three years and this week reiterated its guidance that the next move could be either a rate hike or a cut.

TRADE DEFICIT NARROWS

A separate report by Statscan on Friday showed the country's trade deficit narrowed more than expected in January to C$177 million ($161 million) from C$922 million in December. The December figure was revised down from C$1.66 billion previously.

Exports edged up 0.2 percent for the month, largely due to strong prices for commodities such as crude oil, bitumen and natural gas. The overall prices for exports jumped 5.8 percent while volumes fell 5.3 percent. Imports declined 1.6 percent, pulled lower by weak auto and energy product shipments.

The country's trade surplus with the United States, by far its top trading partner, widened to C$3.62 billion in January from C$3.17 billion in December.


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