The American and Canadian flags

Joey McLeister, Star Tribune

Turns out, Canada had a pretty good jobs report, too

  • Article by: GREG QUINN
  • Bloomberg News
  • October 6, 2012 - 5:05 PM

OTTAWA - Canadian employment rose more than five times faster in September than economists predicted, bolstering the central bank's view that it may raise interest rates as the economy recovers.

Employment rose by 52,100, following an August gain of 34,300. The jobless rate rose to 7.4 percent from 7.3 percent as the labor force grew by 72,600. The jobs gain exceeded all 24 forecasts in a Bloomberg economist survey.

The jobs report was released the same day the United States reported its jobless rate declining to 7.8 percent, the lowest in 44 months.

In Canada, some slack remains in the job market, said Tiff Macklem, the Bank of Canada's senior deputy governor. Macklem reiterated that policymakers may raise their 1 percent benchmark interest rate as the economy recovers. "The story is still there, we are moving forward," said Emanuella Enenajor, an economist at Canadian Imperial Bank of Commerce in Toronto. "If we see a pickup, there is a justification for tightening policy."

Other Group of Seven central bankers have added stimulus this year to boost growth including asset purchases by the U.S. Federal Reserve.

Canada's recovery may still be slowed by problems such as Europe's debt crisis, said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank.

"It may be difficult for the Canadian economy to keep producing these kinds of job numbers," Osborne said. "It's going to be quite some time still before the Bank of Canada can tighten interest rates."

Canada's jobs report showed that full-time employment rose by 44,100 in September. Part-time positions rose by 8,000, Statistics Canada said. Private companies added 29,100 workers and public-sector employment fell by 10,800.

Retailers and wholesalers added 34,100 workers in September. Construction employment gained by 28,800 following a decline of 44,000 in August.

Finance Minister Jim Flaherty said in a statement that he is "encouraged" by the jobs report, which he said shows Canada has "the best job creation record in the entire G-7."

Average hourly wages of permanent employees rose 3.3 percent from a year ago, lagging the prior reading of 3.7 percent. That measure rose 3.9 percent in July.

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