Canada sheds 2,100 jobs in April as Alberta struggles

Unemployment rate holds steady at 7.1 per cent

OTTAWA (Reuters) - The Canadian labour market stalled in April, leaving the unemployment rate unchanged at 7.1 per cent, while job losses in Alberta showed the province was continuing to struggle with the fallout of cheaper oil.

Canada lost 2,100 jobs last month, Statistics Canada said on Friday, below economists' forecasts that the labour force would be unchanged.

Alberta fared the worst, losing 20,800 jobs, including 8,400 in the natural resource sector. The province's unemployment rate edged up above the national average to 7.2 per cent, even as Albertans dropped out of the labour force.

The province, where the country's vast oil sands are located, has suffered because of lower resource prices. The city of Fort McMurray, at the center of the industry, has been battling a massive wildfire this week.

Canada's manufacturing sector lost 16,500 positions, leading April losses. Since December, the industry has lost 52,000 jobs, about half of which were in Alberta, the statistics agency said.

The decline in manufacturing jobs was disappointing given economists have been expecting the sector to be boosted by a weaker Canadian dollar and improving U.S. economy, said Nick Exarhos, economist at CIBC.

Overall, economists said the small decline for the country as a whole was to be expected after March's strong jobs gain. The report can be volatile month to month.

"It could be forgiven for being sort of lackluster after the big jobs gain," Exarhos said. "The labour market has really outperformed what we would have expected given the more or less anemic pace of the Canadian economy in the back half of 2015."

Canada was in a mild recession last year. While growth was stronger at the start of 2016, it is seen cooling in the second quarter.

Natural resource jobs were down by 7,800 in April. Since its peak in April 2014, the sector has lost 50,000 positions, with most of the declines in Alberta.

But the services sector fared better, with a 26,800 increase in retail and wholesale trade jobs, and a 21,900 gain in he accommodation and food services sector.

The report did not alter expectations the Bank of Canada will leave rates where they are when it meets later this month after cutting rates twice in 2015.

The Canadian dollar strengthened against the greenback immediately after the data, although traders also were taking in a jobs report south of the border that showed fewer jobs than expected created last month.

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