TORONTO (AP) — Canada's jobless rate hit a 33-year-low in October, with the economy creating nearly six times more jobs than anticipated in October, according to government data released Friday that could prompt the Bank of Canada to hold interest rates steady despite a surge in the value of the Canadian dollar.
Employers hired 63,000 workers in October, up from 51,100 the previous month to mark the strongest January-to-October growth in the past five years, Statistics Canada reported. The unemployment rate fell from 5.9 percent to 5.8 percent in October — the lowest rate since November 1974.
The market had expected 11,000 new jobs and the jobless rate to stay unchanged at 5.9 percent.
The new jobs were concentrated among public-sector employees, mostly in the service sector.
The news helped push the Canadian dollar to an all-time high immediately after the jobs data, pushing the U.S. dollar to a low of C$0.9386 from C$0.9445 within moments of the release.
The strengthening in the Canadian dollar has raised concerns about inflationary pressure and highlighted the possibility that the Bank of Canada may cut interest rates. But a second consecutive month where the jobless rate was below six percent seems to allay that possibility, analysts said.
''Today's jobs report keeps the positive labor market story alive and the pressure off the Bank of Canada to ease the policy rate anytime soon in order to insure that the domestic economy remains solid,'' said a report from Dawn Desjardins, senior economist at RBC Financial Group.
''However, with the sharp run-up in Canada's dollar likely to dampen demand for Canadian exports, making the trade sector an even greater weight on the pace of economic growth in the quarters ahead, markets will continue to be cautious that the Bank will have to introduce offsetting interest rate cuts in 2008,'' Desjardins wrote.
The report showed that employers added 35,500 full-time workers to the payrolls and 27,500 part-time workers. Hiring was largely in the public sector, where the number of employees has jumped by 5.6 percent in the year to date, driven by gains in health care, other services and public administration.
Overall wage growth slipped to 4.1 percent year-on-year versus 4.2 percent in September. Average hourly wages for permanent workers climbed 4.2 percent from 4.1 percent.