Job creation came to a halt in December as restrictions brought on by surging Covid-19 cases hammered virus-sensitive industries, particularly restaurants and hotels. The total job losses in the month came to 63,000 which was well above the expected number of 28,000 job losses. Unemployment now stands at 8.6% in Canada. In the US, the picture was actually worse relative to expectations. That country lost 140,000 jobs whereas it was expected to gain 50,000. Again, losses were heavily concentrated in restaurants, leisure and hospitality. The overwhelming expectation is that this is a temporary setback and that the losses will be clawed back once the economy reopens. As such, the markets largely shrugged off the poor numbers. Although, the US dollar did weaken in response to the numbers as expectations for another large stimulus package were raised and the prospects of the Fed returning to normalcy any time soon were pushed even further out. The Canadian dollar is now once again at the highest levels since April of 2018.
