The economy shed 18,700 jobs, the most since May 2003, while the unemployment rate stayed at 5.9 percent, close to a 33-year low set in October, Statistics Canada said today. Economists forecast 15,000 new jobs and an unchanged jobless rate, according to the median of 26 estimates in a Bloomberg survey.
The job losses give the Bank of Canada another reason to cut interest rates on Jan. 22 as economists predict. The central bank lowered the benchmark rate last month for the first time in three years, to 4.25 percent, to mitigate the effects of the currency, sluggish U.S. demand and the credit squeeze.
Manufacturing lost 33,200 jobs, bringing the industry's total decline for 2007 to 131,600, a 6.2 percent drop from the previous year. Factory employment has fallen 15 percent since November 2002, rivaling the early 1990s when Canada was in a recession.