WRAPUP 1-Canada hiring jumps in March, latest sign of resurgent growth

Fri Apr 8, 2016 9:27am EDT
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By Leah Schnurr

OTTAWA, April 8 (Reuters) - Canada added far more jobs than expected last month as service sector hiring accelerated and the unemployment rate fell from a three-year high, although economists were wary of reading too much into the notoriously volatile figures.

Still, the report was the latest indication the economy grew strongly in the first quarter after struggling with the oil price shock last year. Separate data on Friday showed activity in the housing sector held up in March, with housing starts declining less than expected to 204,251 units.

The economy created 40,600 jobs in March, Statistics Canada said, far surpassing economists' expectations for 10,000, and driven by a 35,300 increase in full-time jobs. The unemployment rate declined to 7.1 percent, its lowest level since December.

It was the last major piece of domestic data ahead of next week's Bank of Canada interest rate decision. The central bank is expected to keep rates at 0.5 percent given strong first-quarter data.

Even with this week's disappointing trade report, growth is expected to surpass the central bank's 1 percent forecast for the quarter.

While economists pointed to the volatile nature of the report, they were generally encouraged.

"You always take the latest print with a grain of salt, this one with a mountain of salt," said Derek Holt, economist at Scotiabank.

"But the trend nevertheless supports a much more encouraging picture than one might have thought given the downdraft in commodities."   Continued...