Canada adds more jobs than expected in December
By Louise Egan
OTTAWA (Reuters) - Canada's economy created more jobs than expected in December after three months of disappointing employment numbers, once again outperforming the United States, where labor market recovery failed to gain momentum.
About 22,000 more Canadians were working in December than in November, primarily because of an inexplicable surge in manufacturing jobs. The unemployment rate held steady at 7.6 percent, according to Statistics Canada's labor force survey released on Friday.
Markets had expected 17,500 positions to be created in the month and the jobless rate to climb to 7.7 percent. Job growth was flat or weaker than expected in the previous three months.
Canada's upbeat data contrasts with U.S. December nonfarm payrolls figures, also released on Friday, which showed far fewer jobs were created in the month than expected.
The Statscan report shows steady, gradual jobs recovery but was seen as unlikely to persuade the Bank of Canada to raise interest rates this month. It could signal the bank's next rate hike will come sooner than expected, however.
"In terms of the Bank of Canada, I think they'll take some comfort from Canadian labor markets continuing to generate jobs," said Paul Ferley, assistant chief economist at Royal Bank of Canada.
"But I think it's probably not strong enough to alter policy. They'll likely remain on the sidelines, trying to assure the strength is not only sustained but strengthens further going forward," he said.
The central bank hiked its target lending rate three times last year to 1 percent but has been on pause since September. Canada's economy, the star performer among the G7 advanced economies during the global recession, is losing some of its shine with the pace of growth and employment slowing. Continued...