Healthy Canada jobs, factory data spur optimism on economy
By David Ljunggren
OTTAWA (Reuters) - Canada reported unexpectedly healthy jobs and manufacturing sales data on Friday, boosting market optimism that the sluggish economy might finally be starting to accelerate.
Despite a recovery in the United States, Canada's main trading partner, the Canadian economy has been creating few jobs and has been operating well below full capacity.
Revised Statistics Canada data on Friday showed 41,700 jobs were created in July. The unemployment rate dropped to 7.0 percent from 7.1 percent in June.
"I am encouraged by that number ... I remain cautiously optimistic, but work has to be done," Finance Minister Joe Oliver told reporters in Winnipeg.
Oliver cited a 0.9 percent increase in the number of hours worked in July from June as well as the healthy pace of job creation in the United States.
Market analysts had forecast a gain of 20,000 jobs. Statscan had reported on Aug 8 that just 200 new positions had been created in July, but later withdrew that data, citing processing errors.
"Overall, this does suggest that Canada's labor market is improving after hitting a soft patch in the first half of the year. That's now reflecting stronger economic growth," said Sal Guatieri, a senior economist at BMO Capital Markets.
The Bank of Canada has kept its key interest rate at near-record lows since September 2010 to try to stimulate growth, and says it will not consider an increase until the economy shows signs of a sustained recovery. Continued...