TORONTO STAR
NOV 7


Job data shows economy roaring along


SANDRA CORDON
CANADIAN PRESS

OTTAWA - The economy showed a burst of strength in October and added 65,400 jobs to push the unemployment rate down to 7.6 per cent from eight per cent the month before, Statistics Canada reported today.
Almost all those jobs were full-time and spread through different regions, a bright light for an economy that’s hungry for all the good news it can get, analysts said.

“This was definitely a surprise — 65,000 jobs was effectively off the charts, in terms of what we and what financial markets were expecting,” said Warren Lovely, senior economist with CIBC World Markets.

“Similarly, 7.6 per cent was a notable improvement ... on balance, a very impressive showing out of the Canadian labour market.

“What employers are telling us is that they’re encouraged by what they’re seeing ... and moving to staff up in what they hope will be a sustained pickup in business.”

The report, which implies stable interest rates for the rest of this year, boosted an already soaring currency by almost a full cent Friday morning.

The loonie jumped 0.81 of a cent before noon to trade at 75.52 cents US.

A sharp spike in growth in the massive United States economy, which expanded by more than seven per cent in the third quarter, is encouraging companies here to hope that demand for Canadian goods is on the rise.

More evidence of the strengthening American economy also came Friday with reports of an estimated 126,000 jobs added last month, pushing the U.S. jobless rate down to six per cent in October from 6.1 per cent the month before.

That strong U.S. growth will help lift the fortunes of the global economy, said a new report released Friday by the Conference Board of Canada.

“As in past global recoveries, the strengthening U.S. economy will be counted on to lead the way to the promised land,” says the report.

Strong demand in the U.S. economy and around the globe is good news for an export-oriented economy like Canada’s.

Real gross domestic product south of the border should expand by 3.8 per cent next year, although the labour market and high debt levels there pose some risks, the conference board said.

But the party could be cut short if that U.S. growth fizzles. Closer to home, the rising loonie also poses a serious threat to continued job creation, added Lovely.

The dollar, which has risen about 20 per cent so far this year, shows no signs of cooling off.

“All these new hires that we’ve had ... could be in jeopardy, or at least employers may not see the need for additional hires and that would prevent any improvement in unemployment.”

The strength implies the Bank of Canada won’t rush to change interest rates Dec. 2, the central bank’s final rate-setting date of the year, analysts said.

“The fourth quarter is off to a roaring start and this report appears strong almost from head to toe,” said Doug Porter, senior economist with BMO Nesbitt Burns.

“This should further crush any lingering hopes of a near-term rate cut by the Bank of Canada, especially against a backdrop of strong U.S. growth.”

Some market watchers have suggested that, in the face of continued weak inflation, the central bank would reduce its 2.75 per cent policy rate.

Lower Canadian rates would in theory make the loonie less appealing to investors and perhaps slow the dollar’s rise.

But the loonie is on course to soar as high as 80 cents US by early next year, predicted Lovely.

I agree the figures what they saying might be ture. Canadian Statatics dept doing a great job to provide this data.

But I don't understand where these jobs are. Which kind of jobs are they considering...just a labour jobs. I have hardly seen any of my friends or relative sitting home anytime.

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Cheers!!!!!!!