- Avery Shenfeld, chief economist at CIBC World Markets
Canada's unemployment rate rose to the highest level since December 2013, as the economy lost jobs in the agriculture and manufacturing sectors. The number of jobs declined 5,700 and the unemployment rate climbed to 7.2%, up from 7.1%, according to Statistics Canada. In contrast, economists had predicted a 6,000 gain and an unchanged unemployment rate. The labour market has lost momentum over the last year as crude oil prices around $30 a barrel trigger layoffs. Unemployment has climbed from 6.6% in January 2015, and most economists say the recovery from the commodities slump will take several years to unfold.
A separate report showed Canada's merchandise trade gap shrank in December as the value of car and light truck exports increased to the highest in more than a decade, a sign Loonie's weakness is boosting a long-awaited recovery. Canada's trade deficit unexpectedly contracted to C$585 million in December from C$1.59 billion in November as exports surged by a healthy 3.9%. At the same time, imports climbed 1.6% after three consecutive monthly decreases. Exports to the US, which accounts for 74.8% of Canada's global total in December, increased 2.9% while imports grew 1.3%. As a result, Canada's trade surplus with the neighbour swelled to C$3.19 billion from C$2.63 billion in November.
© Dukascopy Bank SA