UPDATE 3-Canada January employment bounces, dampening rate cut talk

Fri Feb 7, 2014 12:34pm EST
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* Employment up 29,400 in Jan., after 44,000 drop in Dec.

* Jobless rate falls to 7.0 pct from 7.2 pct in Dec.

* Full-time gains 50,500, largest since May

* Most of the increase is in self-employment

* Bank of Canada seen less likely to cut rates

By Randall Palmer

OTTAWA, Feb 7 (Reuters) - The Canadian economy in January recouped 29,400 of the 44,000 jobs lost in December, and the unemployment rate fell to 7.0 percent from 7.2 percent, diminishing talk of a possible interest rate cut by the central bank.

Statistics Canada said on Friday that full-time positions rose by an estimated 50,500, the largest such increase since May. However, 28,300 of the new jobs were in self-employment, which usually is less secure and carries fewer benefits.

Royal Bank of Canada assistant chief economist Paul Ferley said the fact that the unemployment rate fell in January after December's rise laid "to rest concerns that maybe the December number was pointing to an onset of greater weakness in labor markets."   Continued...