3 Min Read
OTTAWA (Reuters) - The Canadian economy unexpectedly added tens of thousands of jobs for the second month in a row in October, but with the gain driven by part-time work, the Bank of Canada was likely to remain cautious about the outlook for the economy.
Statistics Canada said on Friday employment jumped by 43,900 jobs, while the jobless rate stayed at 7.0 percent as more people looked for work.
But Canada shed 23,100 full-time jobs as it gained 67,100 part-time positions. Analysts had expected a loss of 10,000 jobs after September's outsized gain of 67,200.
Economists acknowledged that the increase in part-time hiring made the details less upbeat.
"The Bank of Canada will take some comfort from jobs still being created," said Paul Ferley, assistant chief economist at the Royal Bank of Canada.
The central bank kept interest rates on hold last month but said it had considered cutting rates for the third time in two years.
"At the margin, it does slightly dim the chances of a rate cut, just ever so slightly," said Doug Porter, chief economist at BMO Capital Markets.
The goods-producing sector added 20,700 jobs thanks to strength in construction, while the services sector created 23,400 jobs.
In the past year, the number of people employed edged up by 139,600, or just 0.8 percent. The six-month average for employment growth was 19,900 jobs, up from 12,200 in September.
The central bank, which is concerned about weak exports, is unlikely to be impressed by separate data showing Canada ran a record trade deficit of C$4.1 billion ($3.05 billion) in September.
The gap was boosted by the one-off import of machinery for an oil project that pushed imports up 4.7 percent, the biggest monthly rise for more than six years. Exports only edged up 0.1 percent.
The figures weighed on the Canadian dollar versus the greenback, as did a decline in oil prices. [CAD/]
Still, the surge in machinery was a positive sign that companies might finally be starting to invest, said Nick Exarhos, economist at CIBC Capital Markets.
Separate data was encouraging as the pace of purchasing activity in Canada picked up in October, lifted by gains in employment intentions and company inventories.
($1 = 1.3430 Canadian dollars)
Additional reporting by Leah Schnurr in Ottawa, and Fergal Smith, Susan Taylor and Allison Martell in Toronto; Editing by Bernadette Baum and James Dalgleish