UPDATE 2-Canada October job gains weaker than expected

* Economy adds 3,000 jobs vs forecast of 15,000 gain

* Unemployment rate drops to 7.9 pct from 8.0 pct

* Gains in full-time positions and private sector

* Dollar briefly falters before recovering

* No change in outlook for interest rates
(Adds analysts, market reaction, details)

OTTAWA, Nov 5 (BestGrowthStock) – Canada’s economy generated fewer
jobs than expected for the second straight month in October,
increasing the likelihood that any further interest rate hikes
by the Bank of Canada will be pushed into late next year.

About 3,000 people found work in the month, according to
Statistics Canada data released on Friday. That was not enough
to offset the 6,600 jobs lost in September and below the 15,000
employment gain forecast by analysts in a Reuters poll.

The Canadian dollar briefly fell to a session low after the
data but quickly recovered as markets digested some of the
slightly more upbeat details in the report.

“I think there might be a trace of disappointment on the
headline number, but I think on balance this doesn’t move the
needle in a major way,” said Doug Porter, deputy chief
economist at BMO Capital Markets.

The Bank of Canada, which kept its key interest rate on
hold last month after three straight increases to 1 percent, is
widely expected to stay on the sidelines in December and well
into next year.

“It’s certainly not strong enough to get the Bank of Canada
to change their mind on staying on hold any time soon, but by
the same token, it’s not particularly weak, so I don’t think
this really has a major impact on Bank of Canada policy,”
Porter said.

The unemployment rate dropped to 7.9 percent from 8 percent
in September.

The Canadian dollar (CAD=D4: ) fell to a session low of
C$1.0095 to the U.S. dollar, or 99.06 U.S. cents, from around
C$1.0065 to the U.S. dollar, or 99.35 U.S. cents, before the
data. It later recovered to trade nearly unchanged on the day.
Canadian bonds were mildly lower.


The heaviest hiring took place in the information, culture
and recreation sector, followed by construction, manufacturing
and agriculture. Retail and wholesale trade industries let go

Some details in the report were more encouraging. All the
gains were in full-time jobs, while part-time employment fell
for the third straight month. In the first half of this year
part-time jobs grew almost three times as fast as full-time

Similarly, private sector hiring outpaced that of the
public sector, suggesting a more deeply entrenched recovery.

The average hourly wage of permanent employees, closely
watched by the Bank of Canada for inflation pressures, rose 2.1
percent in October from a year earlier. The equivalent figure
for September was 2.5 percent.

Unlike in the United States, Canadian employment levels
have returned to pre-recession levels. But Statscan said the
jobless rate has stayed stubbornly above the pre-crisis 6.2
percent level largely because the working-age population has
grown 2.9 percent and the labor force — those looking for work
— has risen 1.9 percent.

Despite the gains, full-time employment remains well below
its peak, prompting concerns about the quality of jobs.

A report by CIBC this week said the public sector and
construction industry, helped by stimulus spending, have
accounted for one-third of all jobs created during the
(Reporting by Louise Egan and Howaida Sorour; Editing by
Padraic Cassidy)

UPDATE 2-Canada October job gains weaker than expected