OTTAWA — Canada’s jobless situation could get worse before it begins to get better, analysts warned Friday.
The national unemployment rate held steady at seven per cent in June for the fourth consecutive month, but lurking behind that seemingly benign report was some negative news.
After adding a modest number of jobs over the past six months, the economy actually shed about 13,000 positions in June.
The average number of hours worked also dropped in the past three months by almost seven per cent compared with the first quarter of 2001.
“The bottom line is, this report shows that the Canadian labor market had been living on borrowed time,” said Warren Lovely of CIBC World Markets.
The jobless rate could continue to edge up through the second half of this year, possibly as high as 7.5 per cent before the economy turns around, analysts warned.
“I think we’re going to see the unemployment rate go higher before it goes lower,” warned Peter Drake, deputy chief economist with Toronto Dominion Bank.
Still, some analysts say the picture isn’t entirely bleak.
The two weak jobless reports give central bankers plenty of evidence to continue lowering interest rates in the hope of stimulating growth.
And those lower rates are helping to buoy consumer spirits.
