By Kim Mackrael
OTTAWA--The Canadian economy shed jobs in December for the first time since the spring, as provincial leaders tightened economic restrictions to deal with a surge in reported Covid-19 cases and hospitalizations.
Canadian employment declined by a net 62,600 jobs in December on a seasonally adjusted basis, Statistics Canada said Friday. Market expectations were for a decline of 30,000 jobs, according to economists with TD Securities.
The unemployment rate ticked up slightly to 8.6% in December, compared with the previous month's 8.5% level, as more people dropped out of the labor force. Traders had anticipated the unemployment rate would increase to 8.7%, according to TD Securities.
Canada's December jobs report reflects labor-market conditions for the period between Dec. 6 and Dec. 12, at a time when multiple parts of the country were under economic restrictions to curb the spread of Covid-19.
The country's most populous province, Ontario, closed nonessential businesses in the city of Toronto in late November and extended the closures to the remainder of the province in late December. Quebec, Canada's second most-populous province, brought in similar restrictions last month and on Wednesday announced a curfew that will require most residents to stay home between 8 p.m. and 5 a.m. beginning on Saturday.
Statistics Canada said that restrictions that were introduced or tightened after the survey period will likely be reflected in the January jobs report.
Several economists said they anticipate further job losses, as Covid-19 cases continue to rise. Canadian authorities are grappling with a second wave of Covid-19 cases that has resulted in more patients with the disease in Canadian hospitals in late December than at any point during the spring of 2020, according to government data.
"Due to both the continuing rise in virus cases to open the new year and the further curtailments of activity since the last survey, another month of job losses could be on the horizon in January," CIBC economist Royce Mendes said.
When adjusted for U.S. data methodology, Canada's unemployment rate in December was 7.3%. U.S. employment data for December indicated America's jobless rate was 6.7%. The U.S. also lost jobs in December for the first time since the spring.
In December, 1.1 million Canadian workers had lost employment or had their hours reduced because of the pandemic and economic restrictions, Statistics Canada said, compared with 5.5 million in April.
The country's labor underutilization rate, which reflects the proportion of people in the potential labor force who are unemployed, want a job but haven't looked for one, or are working less than half of their usual hours, was little changed in December at 17.1%. That's down sharply from the 36.1% high in April, but above the pre-pandemic level of 11.2%.
December's losses were concentrated among part-time workers, whose ranks fell by 99,000 from the previous month. The economy added 36,500 full-time jobs during the same period.
Employment in the goods-producing sector was little changed in December, while employment in the services sector fell by 74,000, the first decline for that sector since the spring.
Canada's labor force participation rate, meanwhile, fell for a second month in a row in December, to 64.9%, compared with 65.1% in the previous month.
Write to Kim Mackrael at kim.mackrael@wsj.com
(END) Dow Jones Newswires
01-08-21 0943ET
