MNI DATA IMPACT: Canada December Jobs -63K vs Expected -30K

Canada lost 62,600 jobs last month in the first decline since the April lockdown, while unemployment rose a notch to 8.6%, government figures showed Friday.

The rise in unemployment was blunted as about 99,000 more people did not want a job, and there could be further weakness as more local shutdowns took effect in recent weeks.

The job losses were double what economists expected, and most were in close-contact service industries and among younger workers. Full time employment rose 36,500 in December and part-time work fell by 99,000, Statistics Canada said. Economists predicted an overall 30,000 job decline and 8.7% unemployment.

The workforce had been gaining since a collapse in April amid the pandemic lockdown. The economy may stall this quarter as provincial governments impose tougher new restrictions amid a second wave leading to record case tallies. Total hours also declined for the first time since April, by 0.3%, leaving them more than 5% below pre-pandemic levels.

Unemployment hit a record 13.7% in May and had fallen every month since then until December. It had reached a modern-era low of 5.4% before the pandemic.

Some 1.1 million jobs are affected by the pandemic, with employment down 636,000 since February and 488,000 working less than half their regular hours. At the peak that figure was 5.5 million.

The share of people working from home rose to 28.3% in December, and "public health measures being tightened in response to a new wave of COVID-19 infections, the continued viability of telework will be an important factor in the performance of the Canadian economy in 2021," Statistics Canada said.