OTTAWA/TORONTO (Reuters) — Canada added a significantly more-than-expected 74,100 jobs in September and the jobless rate fell to a near six-year low of 6.8 per cent, according to data that was met with some skepticism but also helped boost the currency.
Analysts had forecast a gain of 20,000 positions and said the jobless rate would remain at seven per cent. Unemployment last hit the 6.8 per cent mark in December 2008.
Recent Statistics Canada employment reports have been particularly volatile, alternately rising and falling every month since November 2013.
"Most of us, frankly, don't quite know what to make of the Canadian figures anymore, they've been so volatile. But at least in one way, they're consistent — we continue to see this pattern of one step backward, one step forward," said Doug Porter, chief economist at BMO Capital Markets.
"On the surface, it certainly is a very impressive report, pretty much strong across the board."
Statscan said full-time employment grew by 69,300 jobs while part-time posts added 4,800 positions. The goods-producing sector drove the gain, with notable advances in the natural resources and construction sectors.
The 12-month gain was 150,400 jobs, or 0.8 per cent, while the six-month moving average for employment growth was 15,400, up from 10,200 in August. The labour participation rate stayed at 66 per cent, the lowest since November 2001.
The Canadian dollar strengthened to a session high following the report, hitting $1.1160 to the greenback, or 89.61 U.S. cents, compared with Thursday's close of $1.1173 to the U.S. dollar, or 89.50 U.S. cents.
"We've had a significant move in the Canadian dollar on the stronger side because it really does suggest a small firming in the fundamental outlook," said Camilla Sutton, chief currency strategist at Scotiabank.
At the same time, she said the volatility of the data means it is unlikely to immediately spur a policy shift by the Bank of Canada.
Bank of Canada Governor Stephen Poloz — who says the bank will not raise interest rates from near record lows until it sees signs of a sustained recovery — last month pointed to what he said was a substantial amount of slack in the job market.
"In the environment that we're dealing with now, of huge question marks over growth in the rest of the world, I don't think it significantly moves the needle just yet," said BMO's Porter.
"We'd need some confirmation of this strength in the next few months to really convince the Bank of Canada."