Canada’s labor market lost 200,100 jobs in January as the nation was hit with new lockdown measures meant to contain the Omicron variant of COVID-19.
Statistics Canada said January’s job contraction ended a seven-month streak of gains. Economists had expected a decline of 110,000 jobs in January.
The unemployment rate in Canada rose to 6.5% from 6% in December.
The Canadian dollar fell 0.7% on the latest jobs report to $1.2763 per U.S. dollar. Yields on Canadian two-year bonds rose after U.S. employers added more jobs than expected in January.
The bulk of the job losses in Canada were limited to pandemic-exposed sectors. Accommodation and food services accounted for 113,000 of the lost jobs. Goods-producing sectors recorded a gain, led by construction.
January’s declines were driven by Ontario and Quebec, where the lockdowns were most severe.
Young workers, who are more likely to be in affected sectors, accounted for nearly half of the lost jobs. Canadian employment remains just over 30,000 above pre-pandemic levels.