Canada loses 200,100 jobs in Jan, unemployment rate jumps to 6.5%

The Canadian economy lost a net 200,100 jobs in January, more than analysts had expected, and the unemployment rate jumped to 6.5% from 6.0% in December, Statistics Canada data showed on Friday.

The jobs loss - the biggest since the 207,800 positions shed in January 2021 - was driven by the decision of many jurisdictions to implement strict public health measures to fight COVID-19, Statscan said.

Economists polled by Reuters had predicted a loss of 117,500 jobs and for the unemployment rate to increase to 6.2%.

The employment losses were broad-based, data showed. The economy shed 82,700 full-time jobs and 117,400 part-time positions.

The Bank of Canada said last week it would soon start hiking interest rates from record lows to combat inflation, on the grounds that the economy no longer needs help to deal with the effects of the COVID pandemic.

The Canadian dollar extended its decline, touching 1.2746 to the US dollar, or 78.46 US cents.