OTTAWA (AP) — Canada's economy bucked expectations by creating 46,400 new jobs in January, dropping the unemployment rate to 5.8 percent from a revised six percent in December and matching a 33-year low.
The jobs advance went counter to expectations that a stalling economy would push unemployment higher and slow down the impressive job creating record of the past few years.
Last month, the Bank of Canada revised its expectations for first-quarter economic growth to a rate of 0.6 percent.
But Statistics Canada said Friday that January got off to a fast start in terms of jobs creation, a major indicator of economic strength.
The economy produced jobs in a wide array of industries, with professional, scientific and technical services and construction leading the way.
As well, most new jobs were full-time and in the private sector.
The strong jobs data lends some credence to the view that the Canadian economy is faring better than its U.S. counterpart, said BMO economist Douglas Porter.
And it casts doubt on just how fast the Bank of Canada will cut interest rates in the near term. ''At the end of the day, the jobless rate is at a cycle low and wage growth is at a cycle high, so where's the urgency to cut rates?'' he said.
Even manufacturing, which has been in a deep slump, edged up in January by creating 17,500 jobs, although over the past year the sector remains 113,000 in the hole, with most of those lost jobs in Ontario and Quebec.
Offsetting the gains were losses in retail and wholesale trade and in the information, culture and recreation sector.
The agency had first reported December's jobless rate at 5.9 percent but revised it to 6.0, making January's advance in jobs even more surprising.
Even more surprising, private-sector employment rose by a strong 77,000 in January, bucking the recent trend of strong public-sector job growth and weak private-sector growth.
Still, public-sector job growth, which was flat in January, advanced 6.2 percent over the past year, while the private sector recorded a modest 0.7 percent increase.
Given the continuing tight labor market, the agency said hourly wage growth continued strong, with a year-over-year rise of 4.9 percent for the second consecutive month. That is double the 2.4 percent inflation rate.
Most provinces saw their unemployment rate fall in January, with Quebec setting a 33-year low with a jobless rate of 6.8 percent. Ontario's jobless rate fell to 6.3 percent, although Canada's most populous province remains a weak point on the job creation front, rising only 1.5 percent over the past year.