Loonie Falls as November Employment Continues to Disappoint
THE TAKEAWAY: Canada Net Change in Employment fell for the second month> Part-time Jobs Significantly Dropped > Canadian dollar falls
The labor force report issued by Statics Canada today draws a gloomy picture about Canadian economic prospects as employment disappointingly deteriorated for the second month in November. The economy continues to slash 18.6 thousand workers in the month, after cutting 54.0 thousand jobs in October. The reading missed consensus forecast as economists surveyed by Bloomberg News widely expected a pickup of 20 thousand. From a year earlier, employment edged up 1.2 percent, though.
Canadian Net Change in Employment: January 2010 to Present
Prepared by Trang Nguyen
Employment worsened in November as 35 thousand full-time jobs created were not sufficient to offset 53 thousand part-time jobs shed. Besides, self-employed workers also declined 28 thousand in November. Regarding to sectors, business, retail and whole sale trade reported significant employment losses. Specifically, retail and wholesale trader reduced 34 thousand workers while business, building and support services slashed 29 thousand employees. Those losses were partially eclipsed by gains in employment in “other services” including 20 thousand jobs created in construction, 10 thousand in natural resources and 8 thousand in utilities.
As a consequence of 18.6 thousand jobs loss in the month, unemployment rate rose to 7.4 percent, the highest level in five months. Among those provinces reporting notable employment decrease, Quebec registered the biggest loss with 31 thousand job cut, pushing the unemployment rate up 0.3 percent to 8 percent. On the other hand, employment in Ontario and Alberta improved considerably, with unemployment rate falling to 7.9 percent and 5.0 percent, respectively.
USD/CAD 1-minute Chart: December 2, 2011
Charts created using Strategy Trader– Prepared by Trang Nguyen
Canadian dollar immediately lose ground following the disappointing labor release. As can be seen from the 1-minute USDCAD chart above, the currency pair jumped more than 50 pips from 1.0080 to 1.0135. The Relative Strength Indicator crossing above the 70-level twice indicated that currency traders was massively selling the loonie in favor of the greenback. Obviously, Canada’s worsening employment situation recently stokes concerns on the world's tenth largest economy's outlook. On the contrary, its neighbor United States announcement an hour and a half later that the unemployment rate unexpectedly fell to 8.6 percent, the lowest level since March 2009, sent the greenback higher against major currencies. The Canadian dollar might slide further versus U.S. dollar in North America trading session today.
--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com
To contact Trang, email firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.