The economy created 54,000 jobs in November and the unemployment rate fell, Statistics Canada said in a report that came in much better than expected and shows a nation shaking off a dismal showing in the third quarter.
The federal agency said that of the job growth, 36,100 were full time positions and pointed to the revival of manufacturing hiring and strong gains in Quebec. The unemployment rate fell to 7.5 per cent from 7.6 per cent a month ago.
Since September, the economy has created gangbuster growth, with 166,000 jobs created for the strongest stretch since early 2002. In the past two months alone, 120,000 positions were added.
"Canadian employment was again well above expectations in November, as the job machine appears to be kicking back into high gear again after a six-month lull in the middle of the year," Douglas Porter, BMO Nesbitt Burns economist, wrote in a morning note.
"While this report is full of strong surprises, the further decline in the unemployment rate may be the most surprising." During the summer, the unemployment rate was as high as 8 per cent.
In the United States, meanwhile, non-farm payroll growth came in worse than expected as the nation created 57,000 jobs compared with forecasts of 150,000.
In Canada, economists had expected that there would be moderate job growth. Overall employment was expected to have climbed by about 20,000 positions. A month earlier, the job market surprised on the upside, creating a solid 65,000 jobs.
The November unemployment rate was seen edging up to 7.7 per cent from October's 7.6 per cent.
Statscan's report comes as the economy shows signs of improvement after a weak third-quarter GDP reading of 1.1 per cent growth. Economists and the Bank of Canada had been looking to the final three months of the year for a recovery, with some forecasts looking for an annualized growth rate of 4 per cent.
The economy was hammered in the third quarter by a variety of shocks, including the rise of the dollar, SARS, the mad cow disease and a power blackout in August that resulted in shutdowns of businesses and factories in Ontario.
The jobs report "...will indicate to the Bank of Canada that there isn't as much slack in the economy as they thought likely.," Mr. Porter wrote.
Merrill Lynch economist Robert Spector, in a report titled "Another Canadian Employment Shocker," said the three month gains was the strongest since January-to-March 2002.
"While the incredible ... employment streak likely delays or even removes the chance of any further BoC easing, we will don't see the BoC raising rates any time soon given that the output gap is still likely north of 1 per cent of GDP and inflation is still headed lower in early 2004.'
Mr. Spector noted that productivity, reflected in hours-worked rise of 0.7 per cent from October, is set for a "revival" in 2004. He also noted that Quebec's stellar growth accounted for much of the nation's improvement.
Deutsche Bank economist Amelia Bourdeau wrote that domestic demand has been strong and noted that it's should be "well-maintained" as the rising loonie hits export growth. The report, she says, supports the bank's view that rates will be held.
In Friday's report, Statscan said a key to the growth in November was a bounce back in manufacturing sector employment, mostly in Quebec and Ontario, which added 24,000 jobs across several industries. That compared with a scant 400 jobs that were created in October. Economists suggested that means the U.S. rebound is taking off some of the edge of a rising loonie, which has soared 20 per cent this year.
The dollar got a bit of a boost from the report, closing up at 76.62 cents (U.S.) from Thursday's close of 76.27 cents. Much of Thursday's decline was said to have been prompted by worries that Friday's job report would show weakness.
Statscan noted that despite the recent rise in manufacturing hiring, sector employment is still down 3.3 per cent from a year ago.
Retail and wholesale trade jobs grew by 18,000 positions, driven by gains in retail clothing. On the other end, natural resource jobs fell by 7,000 jobs in the month.
By region, Quebec saw huge gains, with 54,000 jobs created in the month and 80,000 in the past two months. New Brunswick added 5,000 jobs, leaving it with an unemployment rate of 10.2 per cent.
Ontario's employment situation was little changed in the past two months, but has managed to add 84,000 full-time positions since the beginning of the year.
Newfoundland and Labrador lost 3,000 workers in November for the second month of decline, led by a slip in trade and accommodation and food services.
