By Leah Schnurr
OTTAWA, April 8 (Reuters) - Canada added far more jobs than
expected last month as service sector hiring accelerated and the
unemployment rate fell from a three-year high, although
economists were wary of reading too much into the notoriously
volatile figures.
Still, the report was the latest indication the economy grew
strongly in the first quarter after struggling with the oil
price shock last year. Separate data on Friday showed activity
in the housing sector held up in March, with housing starts
declining less than expected to 204,251 units.
The economy created 40,600 jobs in March, Statistics Canada
said, far surpassing economists' expectations for 10,000, and
driven by a 35,300 increase in full-time jobs. The unemployment
rate declined to 7.1 percent, its lowest level since December.
It was the last major piece of domestic data ahead of next
week's Bank of Canada interest rate decision. The central bank
is expected to keep rates at 0.5 percent given strong
first-quarter data.
Even with this week's disappointing trade report, growth is
expected to surpass the central bank's 1 percent forecast for
the quarter.
While economists pointed to the volatile nature of the
report, they were generally encouraged.
"You always take the latest print with a grain of salt, this
one with a mountain of salt," said Derek Holt, economist at
Scotiabank.
"But the trend nevertheless supports a much more encouraging
picture than one might have thought given the downdraft in
commodities."
The Canadian dollar strengthened against the greenback after
the report. CAD/
The service sector contributed the most to the labor
market's improvement, led by a 24,900 increase in jobs in
healthcare and social assistance. Economists had expected to see
a rebound in the sector in March after an outsized decline the
previous month.
There were gains in other service industries as well,
including accommodation and food, and professional services. The
goods-producing part of the economy fared poorly, with declines
in manufacturing and construction.
The natural resources sector continued to shed jobs with a
loss of 2,100 positions. The sector has seen a more than 4
percent decline in jobs in the past year as commodity prices
have slumped.
Data from the Canadian Mortgage and Housing Corporation
continued to show the regional divide in the housing market with
starts declining in the oil-exposed prairie provinces but
gaining in Ontario. Groundbreaking in British Columbia also
cooled, which could alleviate concerns the province is
overheating.
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Graphic - Canada jobs, unemployment http://link.reuters.com/fax39t
Graphic - Full-time vs. part-time http://link.reuters.com/pev29v
Graphic - Temporary vs. permanent http://link.reuters.com/xuf98v
Graphic - Canada economic dashboard http://graphics.thomsonreuters.com/15/sc-canada/index.html
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