Published October 07, 2011
A whopping 60,900 new jobs helped slice Canada's unemployment rate to 7.1 percent in September from 7.3 percent in August, Statistics Canada said Friday.
This far exceeded the median forecast of 10,000 new jobs in a Reuters survey of economists after August's decline of 5,500. The most optimistic forecasters had predicted 30,000 new positions in September.
Adding to the positive news, September saw 63,800 full-time additions, while part-time employment declined by 2,900.
Of the new jobs, however, 38,400 were in educational services, presumably largely the result of the return to work of teachers and assistants who were laid off for the summer. Statscan tries to adjust for seasonality but said there had not been enough of a consistent pattern in this sector for specific months.
Canada's unemployment rate is the lowest since December 2008. The data tempered market expectations of a rate cut by the Bank of Canada as it signals an economy still humming despite dire news out of Europe.
``I think it weighs against possible rate cuts. The Bank of Canada is probably more convinced the economy is picking up and doesn't require further stimulus,'' said Sal Guatieri at BMO Capital Markets.
``It should be positive for the Canadian dollar today.''
Overnight index swaps, which trade based on expectations for the central bank's key policy rate, showed that traders cut the odds of a rate cut this year or next.
The yield on the two-year Canadian government bond , which is especially sensitive to Bank of Canada interest rate moves, rose to 0.993 percent from 0.939 percent just before the release.
The Canadian dollar climbed to a session high C$1.0332 to the U.S. dollar, or 96.81 U.S. cents, immediately after the data was released, up from Thursday's North American session close at C$1.0378 to the U.S. dollar, or 96.36 U.S. cents.