Canada loses jobs but full-time positions surge

Fri Apr 8, 2011 12:23pm EDT
 
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By Louise Egan

OTTAWA (Reuters) - Canada's economy unexpectedly lost jobs in March but a huge jump in full-time positions suggested solid economic growth and bolstered expectations the central bank will raise interest rates later this year.

The "curveball" report initially knocked the Canadian dollar lower. But traders, seeing signs of strength beneath the weak headline figure, then pushed the currency to its strongest level since November 2007.

Statistics Canada reported on Friday net job losses of 1,500 in March, the first decline since September and a figure that was contrary to analyst forecasts for a gain of 26,500.

But the report showed employers hired a whopping 90,600 full-time workers in the month, offset by a slightly bigger decline in part-time jobs.

The unemployment rate dropped to 7.7 percent from 7.8 percent in February, as expected, but is still stubbornly high compared with pre-recession levels.

The report did not change expectations that the bank will keep its key interest rate on hold on Tuesday at 1 percent, but could affect the timing of its next move.

"The (central) bank should take away from this that the economy itself is on pretty decent footing when it comes to the labor market," said Mark Chandler, head of fixed income and currency strategy at RBC Capital Markets.

"The headline number, which I'm sure will get a lot of play in the election campaign, really was the least important point of the report."   Continued...

 
<p>A construction worker works on building new homes in Calgary, Alberta, May 31, 2010. REUTERS/Todd Korol</p>