More proof the entire global economy is cooling rapidly comes from North of the border where Canada Loses Most Jobs Since 2009 Recession as Jobless Rate Rises to 7.3%
Canada’s economy lost the most jobs since the 2009 recession during October, led by declines in the manufacturing and construction industries, cementing projections that the recovery is slowing.
Employment fell by 54,000 after an increase of 60,900 jobs in September, Statistics Canada said today in Ottawa, in the biggest monthly decline since February 2009. The unemployment rate rose to 7.3 percent from 7.1 percent. Economists surveyed by Bloomberg News had forecast an increase of 15,000 jobs and a 7.1 percent jobless rate in October.
“The headline was bad, and the underlying numbers don’t look great either,” said Rudy Narvas, senior economist at Societe Generale in New York, by phone. “It’s not pretty.”
The world’s 10th-largest economy shrank in the second quarter, two years after its last recession. Finance Minister Jim Flaherty told lawmakers Nov. 1 the global economic recovery remains fragile, and that too many Canadians remain unemployed.
The monthly decline in Canada was led by the loss of 48,400 jobs in the manufacturing sector and 20,100 jobs in construction. Natural resources posted the biggest gain, adding 12,100 jobs.
“Essentially, we have created no net new jobs in the past three months,” said Sal Guatieri, senior economist at Bank of Montreal’s Capital Markets unit, referring to Canada. Between August and October, the economy added only 1,400 jobs, according to Statistics Canada figures.
Full-time employment dropped by 71,700 in October, while part-time jobs increased by 17,700. Self-employed workers declined by 18,100, while workers classified as employees fell by 35,900.
Employment in the private sector slid by 32,000, while public-sector jobs dropped by 3,800.
“Suddenly, the jobs market doesn’t look quite so rosy in Canada,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce in Toronto, said in a note to clients. The monthly decline suggests economic growth could be “much weaker” in the fourth quarter than in the third, he said.
“Meaningful Miss” Sends Loonie Lower
Canada’s dollar dropped against most of its major counterparts after a government report showed the jobless rate unexpectedly increased in October as the nation’s employers eliminated positions.
The Canadian currency slid for the first time in three days versus its U.S. counterpart on reduced demand for risk after Germany’s Chancellor Angela Merkel said Group of 20 leaders were unable to agree on International Monetary Fund resources. The Canadian dollar headed for its first weekly decline since September on increased speculation the Bank of Canada will lower borrowing costs following the jobs report.
“It’s a miss in a very meaningful way,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto, in a telephone interview. “This is likely to contribute to some Canada lagging.”
The loonie, as the Canadian currency is nicknamed for the image of the aquatic bird on the C$1 coin, depreciated 1.2 percent to C$1.0193 per U.S. dollar at 11:09 a.m. Toronto time, extending its weekly drop to 2.7 percent. It touched C$1.0229, the weakest level since Oct. 20. One Canadian dollar buys 98.16 U.S. cents.
Expect more weakness in the Canadian economy and the Loonie in the coming months. No major countries will escape the global slowdown. The commodity currencies of Canada and Australia may be in for considerable declines as both countries head for recession.
My report on the US jobs situation will be out shortly.
Mike “Mish” Shedlock
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