UPDATE 3-Canada job market picks up in March, led by gov't hires
* Canada economy creates 42,900 new jobs in March
* Unemployment rate dips to 6.9 percent from 7.0 percent (Adds PMI data, U.S. employment figures, quotes)
By Louise Egan
OTTAWA, April 4 (Reuters) - Canada's economy churned out twice as many new jobs as expected in March and the unemployment rate dropped a notch, but most of the gains were in the public sector and part-time positions, a sign businesses were still cautious about hiring.
The report adds to recent data showing the economy is strengthening after a weak patch in December and at the start of 2014, but it is unlikely to knock the Bank of Canada off its neutral stance on interest rates, analysts said.
Statistics Canada reported on Friday the job market added 42,900 net new positions in the month, compared with market expectations of 20,000. The jobless rate dipped to 6.9 percent from 7.0 percent.
In a separate report, the Ivey Purchasing Managers Index showed the pace of purchasing activity slowed in March and the employment measure contracted.
The news of strong North American hiring - U.S. nonfarm payrolls jumped by 192,000 new jobs last month - helped push the Canadian dollar to its highest in nearly a month.
But the jobs numbers are volatile from month to month, and analysts warned that it was premature to proclaim all was rosy after a slow spell. Continued...