February jobless rate rises to 7.7%

February jobless rate rises to 7.7% (CBC)

Canada's unemployment rate rose to 7.7 per cent in February, when 82,600 jobs were lost, the fourth consecutive month of declines.

The February drop pushed the national unemployment rate up half a percentage point, from 7.2 per cent in January, Statistics Canada reported Friday. The jobless rate has not been this high since it was eight per cent back in August 2003.

Economists had been expecting February jobs losses to come in around 55,000, and for the overall unemployment to rise to 7.4 per cent.

All the February employment losses were in full-time work, with 110,900 jobs disappearing, while part-time employment edged up slightly.

Since the peak last October, 295,000 jobs in the country have been lost as the economy fell into recession. In January, there were 129,000 job losses.

In February, the largest decline in employment occurred in Ontario, which lost 35,300 jobs, followed by Alberta, where 23,700 jobs vanished, and Quebec with 18,400 jobs lost.

Speaking at Fanshawe College in London, Ont., where he was announcing funding for labour initiatives, Prime Minister Stephen Harper called the job losses "unfortunate."

However, he repeated his recent message that he believes the Canadian economy will get out of the recession before other countries. Harper also predicted that Canada will experience a labour shortage when the economy resumes growing.

Finance Minister Jim Flaherty said he was not surprised by the latest jobless figures.

Vanishing construction jobs

"The overall numbers are not going to be good for some time, even though they'll be better than they would have been because of the economic stimulus," he said from England, where he is attending a meeting of world finance ministers.

The construction sector lost 43,200 jobs last month, accounting for over half the decline in overall employment.

Job losses were also in professional, scientific and technical services, with 31,100 jobs cut. The trade sector lost 17,700 jobs, while employment in educational services fell by 14,700.

The battered manufacturing sector actually added 24,700 jobs last month, but employment in that sector is down by more than 104,000 from February 2008.

Agriculture was the only other sector to add jobs last month, as employment rose by 16,700.

Deeper pessimism

Some economists predict further job losses.

"February’s numbers confirm our pessimistic outlook for Canadian employment," said TD Bank economist Grant Bishop. "We believe that we’re only at the half-way mark for the total job losses over this recession, and forecast the national unemployment rate will rise to 10 per cent by year-end."

BMO Capital Markets economist Douglas Porter said Canada has now lost 295,000 jobs from the peak level reached just last October, or 1.7 per cent in the brief span of four months. The United States is down 3.2 per cent from its peak employment level in December 2007.

Canada will likely continue to catch up to the U.S. drop, "as previously robust sectors are vulnerable to further serious job losses, most notably construction," Porter said. "While today’s results are not wildly out of bounds versus consensus, they loudly confirm that Canada is in the heart of a recession which is quickly rivalling that of the early 1990s and early 1980s."

In the recession of the early 1980s, Canadian unemployment peaked at 12.9 per cent, while in the early 1990s economic decline, the jobless rate rose to a peak of 12.1 per cent.

Hot topic in House of Commons

The sinking economy was the hot topic in question period in Ottawa on Friday.

"A staggering 83,000 Canadians lost their jobs in February," long-serving Liberal MP Ralph Goodale said. "Canada's job loss rate is now twice as bad as that in the United States. When will the prime minister acknowledge that the economy, on his watch, has tanked?"

Conservative MP and president of Treasury Board Vic Toews said the government sympathizes with Canadians who have lost their jobs but suggested the situation would be much worse had Canadians voted for the carbon tax plan the Liberals championed during the last federal election.

Toews added the government's recently passed budget and stimulus bill will help the economy rebound.

"The fact is that the benefits would have filtered out earlier had the Liberal part not played games and delayed passage of the federal budget," Toews said.