By Himani Ediriweera
The dollar made a quick recovery after Statistics Canada released the unemployment report that shows Canadians are back to taking care of business.
The report shows more than 54,000 jobs were created to reduce the unemployment rate to 7.5% in November from 7.6% the month before.
It marked the third straight month of healthy job creation, surprising analysts and giving the loonie a dramatic boost amid signs the economy is growing at a faster clip than expected.
Since September, the country has added 166,000 jobs, Statistics Canada reported yesterday -- well above the 52,000 jobs added in the first eight months of this year.
"The employment numbers surprised us once more," said RBC Financial Group economist Carl Gomez. "There's a lot of good news in the report and very positive for the situation in Canada."
The report shows that the number of unemployed dropped from 1,309,600 last month, and those working increased from 15,813,300 to 15,867,400.
Newfoundland showed the highest rate of unemployment with 17.4%, with Ontario in the middle at 6.8% -- a drop from 7% last month, and Alberta with the lowest jobless rate at 5%.
Gomez said 36,100 jobs created were full time and that 67.6% of the population over 15 years old were active participants in the labour force. The rate has been steadily decreasing since a troubled summer when numbers hit 8% in August.
The figures vindicate the Bank of Canada's decision earlier this week to leave its key interest rate unchanged at 2.75%, Gomez said.
Financial markets seemed to interpret the report as a sign the central bank will leave rates stable well into 2004 and boosted the loonie more than half a cent early yesterday.
The Canadian dollar initially jumped by half a cent after the report was released. But yesterday it had stabilized at 76.62c US, up 0.35c from Thursday's close.
And in the midst of Canada's strengthening economy came news that the U.S. unemployment rate also declined -- by one-tenth of a percentage point to 5.9%.
U.S. companies added 57,000 new jobs in November. Economists had predicted that about 150,000 new jobs would be added.
Experts say monthly payroll gains of 200,000 to 300,000 jobs are needed to significantly lower the unemployment rate and sustain a labour market recovery.
"It's an improving trend and indicative of a solid but sustainable economic recovery -- and although the U.S. is not as strong as expected, the results are still positive," Gomez said. He added it is expected the dollar will hit 80c by the end of 2004 and Canada's unemployment rate will drop to 7.3%.
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