Canada adds whopping 52,100 jobs in September

Fri Oct 5, 2012 9:14am EDT
 
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By Randall Palmer

OTTAWA (Reuters) - - The Canadian economy added a thumping 52,100 jobs in September, almost all of them full-time, defying expectations and bolstering the Bank of Canada's case for an eventual interest rate rise.

However, the unemployment rate rose modestly to 7.4 percent from 7.3 percent in August as more people participated in the labor market, Statistics Canada said in its release on Friday.

The economy has added an average of 21,600 jobs per month in the past six months. September saw 44,100 new full-time jobs and 8,000 part-time.

The median forecast in a survey of analysts was for 10,000 new jobs, and even the most optimistic forecast was only for 28,000, after August's rise of 34,300.

"The key point here is the economy is still churning out jobs at a healthy pace," said BMO Capital Markets deputy chief economist Doug Porter.

"I wouldn't read too much into the month-to-month number but it's impressive and it is not reversing a big decline the prior month, so we can't brush this aside."

Still, Porter said while the Bank of Canada is concerned about the economy growing faster than potential, the rise in the unemployment rate and tepid gross domestic product numbers suggest that the economy is not at that stage yet.

The central bank repeated on Thursday that it may have to hike rates to the extent that growth continues and excess supply is gradually absorbed.   Continued...