* Canada adds 11,900 jobs, more than expected
* Jobless rate lowest since December 2008
* Canadian dollar strengthens to session high on news
By David Ljunggren
OTTAWA, Oct 11 Canada added 11,900 jobs in
September and the unemployment rate dropped to an almost
five-year low of 6.9 percent, largely because fewer youths were
looking for work, Statistics Canada said on Friday.
While September's report shows Canada had largely regained
jobs lost during the 2008-09 recession, there are few signs
resurgent growth will appear soon enough to prompt a near-term
interest rate hike by the Bank of Canada.
Doug Porter, chief economist at BMO Capital Markets, said
the report was respectable.
"Definitely the eye-popping statistic here was the fact that
the jobless rate has dropped below 7 percent, gripping the 6
percent handle for the first time in almost five years. That's
always an encouraging sign," he said.
The gain was greater than the 10,000 new jobs predicted by
market analysts. The jobless rate, which stood at 7.1 percent in
August, touched the lowest since the 6.8 percent recorded in
"Today's job numbers show that Canada's economy is on the
right track," Finance Minister Jim Flaherty said in a statement.
"That being said, the global economy is still fragile, but there
are still too many Canadians out of work."
Average monthly job growth over six months, seen as a more
reliable gauge of the jobs trend, was 23,100, up sharply from
12,300 in the prior six-month period. March's heavy job losses
of 54,500 are no longer a part of the most recent six months.
The jobs report suggests plenty of slack remains in the
economy, meaning the Bank of Canada can be expected to keep its
key rate at a near record low of 1 percent, where it has been
since September 2010.
"Given indications that the bank is probably lowering its
outlook for growth over the second half of the year it's not the
kind of environment where it sounds like the bank will
contemplate any near-term move on rates," said Paul Ferley,
assistant chief economist at the Royal Bank of Canada.
Canada's jobless rate has yet to fall to pre-crisis levels.
During most of 2008 the unemployment rate sat between 5.9
percent and 6.1 percent.
Markets were more focused than usual on the Canadian data
since the U.S. government did not release employment report for
September, due to a partial government shutdown.
The Canadian dollar firmed to C$1.0376 versus the
U.S. dollar, or 96.38 U.S. cents, after the data. This was
stronger than just prior to the data's release and stronger than
Thursday's North American finish at C$1.0396, or 96.19 U.S.
Statscan said the main reason for the lower unemployment
rate was the drop in the number of young people seeking work.
The overall participation rate, which includes those working
or actively looking for work, slipped to 66.4 percent, the
lowest since the 66.3 percent recorded in February 2002.
"One of the reasons young workers may be discouraged is
that, since the recession, Canadian employers have added barely
enough jobs to keep pace with population growth," Erin Weir, an
economist with the United Steelworkers union, said in a
In September, Canada added 23,400 full-time jobs and lost
11,500 part-time jobs. Since September 2012, the economy has
added 212,400 positions, an increase of 1.2 percent.
Employment in the hard-hit manufacturing sector dropped by
26,000 jobs in September. Finance, insurance, real estate and
leasing added 33,200 jobs.
Wage growth for permanent employees, closely watched by the
central bank, was 1.8 percent in September compared with a year
earlier, up from 1.5 percent in August.