Canada posts record jobs gain in April

Fri May 7, 2010 3:02pm EDT
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By Louise Egan

OTTAWA (Reuters) - A record number of Canadians returned to work in April, stunning markets and adding pressure on the Bank of Canada to raise interest rates in June, ahead of other major industrialized countries.

Job gains soared past all forecasts to total 108,700 in the month, the highest number since Statscan began tracking the data in 1976, and exceeding even the most optimistic estimate in a Reuters poll, which yielded a median forecast of 25,000 new jobs. The percentage increase, at 0.6 percent, was the largest since August 2002.

The data showed private business, not government, did the hiring for a second straight month.

The Canadian dollar shot up to a high of C$1.0338 to the U.S. dollar, or 96.73 U.S. cents, compared with its close on Thursday of C$1.0523 to the U.S. dollar.

"I think this is fantastic news ... It's just another sign that the Canadian economy is doing better than anyone could have hoped at the start of the year," said Steve Butler, director of foreign exchange trading at Scotia Capital.

The report reminded investors of Canada's upbeat recovery after days of market gyrations over the Greek debt crisis and fears it could spread to other euro zone countries.

"If anybody was in doubt that interest rates were going higher and that they need to be normalized, I think that doubt is no longer with us ... this is consistent with a rising-rate environment, and that process is going to begin soon," said Craig Wright, chief economist at Royal Bank of Canada.

JUNE RATE HIKE SEEN   Continued...