THE Canadian economy lost more jobs than expected in January, posting its first decline since May 2021 as the Omicron-driven COVID-19 wave peaked, latest data showed, but analysts expect a quick rebound in coming months.

Canada shed 200,100 jobs, roughly matching the losses in January and April 2021, and the jobless rate jumped to 6.5 percent from a revised 6 percent in December, Statistics Canada said.

Analysts surveyed previously had expected a loss of 117,500 jobs and the unemployment rate to rise to 6.2 percent.

“It’s a little bit weaker than we expected perhaps, but it really lines up quite well with what we saw last spring,” said Andrew Kelvin, chief Canada economist at TD Securities.

“I think it is something that we look through given that we can connect it quite directly to the lockdowns related to the Omicron variant.”

Canada’s largest two provinces, Ontario and Quebec, tightened restrictions as the Omicron variant took hold. Ontario reopened gyms and indoor dining this week, while Quebec reopened restaurants and has allowed some sports activities.

Similar patterns in the previous two COVID-19 waves led to nearly identical job losses, followed by a full rebound within one to three months. Canada’s health officials said last week Omicron infections had passed their peak.

Additionally, Statistics Canada said the jump in the unemployment rate last month was entirely due to temporary layoffs and people scheduled to start work soon, suggesting a looming rebound.

Still, the losses were harsh, particularly in high-contact services. Accommodation and food services shed 112,900 jobs, with another 48,400 net jobs lost in information, culture and recreation.(SD-Agencies)