UPDATE 3-Canada posts second month of big job gains; jobless rate dives

Fri Nov 7, 2014 10:30am EST
 
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(Adds reaction from finance minister, analyst)

By David Ljunggren

OTTAWA Nov 7 (Reuters) - Canada unexpectedly added 43,100 new jobs in October, and the unemployment rate dropped to a nearly six-year low of 6.5 percent, prompting market optimism that the sluggish job market might finally be improving.

Analysts had expected a loss of 5,000 jobs after September's gain of 74,100 positions.

The jobless rate, down from 6.8 percent in September, was the lowest since the 6.4 percent recorded in November 2008, Statistics Canada said on Friday.

"I think that the shift in the labor market is very encouraging," said Scotiabank chief currency strategist Camilla Sutton. "All in all, it would suggest that the Canadian economic fundamental situation is a bit better than had been priced in."

Canada's persistently sluggish job creation record and slack in the economy are among the reasons that Bank of Canada Governor Stephen Poloz said on Tuesday that interest rates needed to remain near-record lows for now.

The Canadian dollar rallied nearly a cent to a session high against the U.S. dollar, touching C$1.1330 to the greenback, or 88.26 U.S. cents, and above Thursday's close of C$1.1426, or 87.52 U.S. cents.

Finance Minister Joe Oliver told reporters that the recent trend was "very positive." His media event was announced late on Thursday, but his office denied any suggestion that this meant he was signaling the figures were likely to be good.   Continued...