Canada’s January unemployment rate increases, likely to remain high in H1 2016 on lower oil prices

In January, Canada lost 5,700 jobs, raising the jobless rate to 7.2%. The total employment rose just 07%, adding 126,000 jobs in the 12 months ending January 2016. The full-time employment and part-time employment remained the same. However, all the job creations in last year were full-time jobs. Employment throughout most industries was down to flat, where manufacturing lost 11,000 jobs, trade and transportation lost 10,400 jobs and agriculture 13,700 jobs. On the contrary, information, recreation and culture witness considerable job gains of 15,800, whereas other services gained 9,600.

Region wise, Ontario recorded employment gains of 33,000, while Quebec posted job gains of 11,500 in January. These two were the only provinces that recorded job creation in the month. British Colombia lost 7000 jobs, while Newfoundland, Manitoba and Alberta lost 2,400, 1,800, and 3,900 jobs respectively.

Since September 2015, job growth in Canada has stalled mainly due to the negative effect of decline in oil prices on the economy.  The economic slowdown and job losses are likely to continue in Alberta, Newfoundland and Saskatchewan due to the decline of oil prices.

On the contrary, other provinces such as PEI, Ontario, Quebec and British Columbia, have been gaining from the positive impact of Canadian dollar's depreciation on their trade position, which will help create jobs in 2016. Overall, the negative impact of lower oil prices are expected to keep the jobless rate high at 7.2% in H1 2016, before it starts to decline slowly.