Canada jobless rate under 7 percent for first time in almost five years

Sun Oct 13, 2013 4:45am EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada added 11,900 jobs in September and the unemployment rate dropped to an almost five-year low of 6.9 percent, largely because fewer youths were looking for work, Statistics Canada said on Friday.

While September's report shows Canada had largely regained jobs lost during the 2008-09 recession, there are few signs resurgent growth will appear soon enough to prompt a near-term interest rate hike by the Bank of Canada.

Doug Porter, chief economist at BMO Capital Markets, said the report was respectable.

"Definitely the eye-popping statistic here was the fact that the jobless rate has dropped below 7 percent, gripping the 6 percent handle for the first time in almost five years. That's always an encouraging sign," he said.

The gain was greater than the 10,000 new jobs predicted by market analysts. The jobless rate, which stood at 7.1 percent in August, touched the lowest since the 6.8 percent recorded in December 2008.

"Today's job numbers show that Canada's economy is on the right track," Finance Minister Jim Flaherty said in a statement. "That being said, the global economy is still fragile, but there are still too many Canadians out of work."

Average monthly job growth over six months, seen as a more reliable gauge of the jobs trend, was 23,100, up sharply from 12,300 in the prior six-month period. March's heavy job losses of 54,500 are no longer a part of the most recent six months.

The jobs report suggests plenty of slack remains in the economy, meaning the Bank of Canada can be expected to keep its key rate at a near record low of 1 percent, where it has been since September 2010.   Continued...

A man holds a sign regarding unemployment on the street in Toronto, in this June 22, 2010 file photo. REUTERS/Mark Blinch