UPDATE 2-Canada jobs surge in Sept, but driven by the self-employed

Fri Oct 7, 2016 9:31am EDT
 
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(Adds details, market reaction, background, byline)

By Leah Schnurr

OTTAWA Oct 7 (Reuters) - Canada added far more jobs than expected in September, mainly because of the biggest increase in self-employed workers in more than seven years, data from Statistics Canada showed on Friday.

Economists did not expect the report, which has been volatile month-to-month, to move the Bank of Canada off the sidelines when it meets later this month. A senior policymaker said on Thursday there was still more slack in the labor market than the unemployment rate would suggest.

After cutting interest rates twice last year to offset the effects of plunging oil prices, the central bank is largely seen holding them where they are at least through next year.

The economy created 67,200 new jobs last month, handily topping the increase of 10,000 that analysts had forecast. The unemployment rate held at 7.0 percent, as expected, as slightly more people were looking for work.

But 50,100 of those jobs went to Canadians who consider themselves to be self-employed, the biggest monthly increase since June 2009.

"Behind Canada's great headline increase in employment, the details for September were still soft," said William Adams, senior international economist at PNC Financial Services Group.

Still, Adams said, given September's employment growth, recent economic improvement and the gain in oil prices, the Bank of Canada is likely to hold rates through the end of 2017.   Continued...