OTTAWA (Reuters) - The Canadian economy added six times more jobs than expected in October and wages climbed 4 percent on the year, limiting the Bank of Canada's options to cut interest rates any time soon.
The Canadian dollar shot up to a new historic high on the data, which showed that 63,000 jobs were created last month and that the unemployment rate fell to a 33-year low of 5.8 percent, from 5.9 percent in September.
The figures, released by Statistics Canada on Friday, showed that most of the hiring in Canada was concentrated in the public sector and services industries and was split evenly between full-time and part-time positions.
Evidence of an air-tight job market and wage growth that outpaces inflation limits the Bank of Canada's options to cut interest rates because lower rates could let inflation creep too high.
The average hourly wage grew 4.2 percent on the year for permanent employees and 4.1 percent for all workers, well above the 2.5 percent inflation in the same period.
Statscan showed that services sector employment grew by 66,000 jobs in October, led by health care and social assistance.
"It seems that all that fiscal stimulus we're seeing is translating into rising public sector payrolls, and it's just giving yet another boost to an already strong labor market," said Doug Porter, deputy chief economist at BMO Capital Markets.
In the first 10 months of 2007, employment grew by 2.1 percent, the strongest pace in five years.
"These are spectacular job growth numbers," said Avery Shenfeld, a CIBC world markets economist.
"We'd like to see a bit more coming from the private sector. But it's hard to argue with a multi-decade low in the unemployment rate and lots of jobs coming that are going to pay incomes."
According to the latest Labour Force survey, record numbers of Canadians are holding down jobs with October's employment rate reaching an all-time high of 63.7 per cent.
From January to October, Canada's robust economy created 346,000 new jobs, representing the strongest growth for that period in five years.
"There was job loss in Canada during the last month, however, the job creation rollover was extremely strong, much stronger than we expected," BNN's Michael Kane told CTV Newsnet on Friday.
Women and older workers continue to lead the way in employment last month.
Women aged 25 and over posted a record employment rate of 59.4 per cent along with the lowest unemployment rate -- 4.3 per cent -- in more than 30 years.
Workers aged 55 and over continued to see massive gains demonstrating an all-time high participation rate of 33.9 per cent.
Employment for older workers has risen 6.9 per cent since the start of the year, driven by the participation of older women in the work force. By contrast, employment levels have risen 1.2 per cent for those aged 25 to 44 for 2007.
The service sector continued to elevate the nation's employment level with the highest gains in health care, social assistance and public administration. In October, service sector jobs increased by 66,000, representing a growth of 3.2 per cent in 2007.
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