OTTAWA - The Canadian dollar jumped early Friday as the country's main statistical agency reported the economy unexpectedly created jobs in August and that the private sector kicked into action for the first time in almost a year.
Last month saw almost a total reversal of July's disappointing report with 27,100 net jobs create, and the private sector adding 49,200 workers, the first time they have hired more than fired since September.
The result, even though all the new jobs were in the part-time category, helped push the loonie up eight-tenths of a cent to 91.44 cents US in pre-market trading. Higher crude oil prices were also a likely factor behind the dollar's rise.
The surprisingly strong jobs report may have taken some steam out of the Liberal Party's plans to topple Stephen Harper's minority Conservative government at the first opportunity once Parliament resumes in 10 days.
Liberal Leader Michael Ignatieff pledged this week his party will no longer back the government, which could trigger an election if the New Democrats and Bloc Quebecois continue to vote against budget measures.
But if employment does continue to rise in future monthly reports, it undercuts the Liberals' key argument that the Tories have mismanaged the economy and failed to adequately support the growing ranks of the jobless.
Economists cautioned that the Statistics Canada monthly jobs survey is notoriously volatile and that the details of the August report are not so impressive as the headline numbers.
For instance, the unemployment rate edged up one-tenth of a point to 8.7 per cent - the highest in 11 years-as more Canadians began looking for work.
But given that the pre-release consensus was for a 15,000 job loss, and that the United States continued to shed more than 200,000 jobs in the same month, economists said Friday the positives of the report outshone the negative.
"Half a loaf, or in this case, half a job, is better than none, so an increase in Canadian employment driven by part-time work is still an encouraging sign post of an economic recovery now underway," said CIBC chief economist Avery Shenfeld, one of the few to forecast a net gain for the month.
"It just reinforces the view that the recession has ended and that we're in the early stages of a recovery," added Douglas Porter, deputy chief economist with BMO Capital Markets.
Canada remains a long way from returning to the situation of a year ago, before the global recession took a firm hold last October.
-August brought a continued deterioration of full-time work, with 3,500 additional job losses bringing the total since last October to 486,000.
-There were almost 50,000 Canadians out looking for work last month, meaning that the number of officially unemployed rose by 21,900.
-Most of the pick-up was in the lower paying service sectors, while high-paying, high-productivity manufacturing work continued to be scarce, falling by another 17,300.
-Hourly wages were 3.3 per cent above last August levels, the lowest growth rate in more than two years.
As well, economists caution about reading too much into any one-month survey. They point out that the national agency threw a head-fake in April by reporting 35,900 job gains in the middle of a severe slump, only to take them all away in May.
Still, the gains in part-time work, all in the private sector, and the noticeable slowing in the hemorrhaging of full-time employees in the past several months will be seen as welcome signs for the economy going forward.
Scotiabank economist Derek Holt said the jobs report - as imperfect as it was - will support the Canadian dollar in the short term, but is unlikely to impress the Bank of Canada from moving off its stimulus policies until there is more concrete and widespread evidence of an economic rebound.
The trend line is encouraging, however, Statistics Canada pointed out.
Since October, Canada has lost 387,000 jobs, but only 31,000 of those have come in the last five months.
"In the five months following the employment peak of October 2008, employment fell in almost all industries, especially manufacturing and construction," the agency noted.
"In the past five months, however, while manufacturing has continued its decline, employment in construction has stabilized and it has increased in most service industries."
In August, better labour conditions were noticeable across a number of industries, including construction, financial services, retail and wholesale trade, as well as real estate and leasing. Adult women were the most successful in finding jobs.
Losses came in business, building and other support services, education services and the battered manufacturing sector.
Students continued to experience the worst of summer job markets, however, with the average jobless rate hitting 19.2 per cent, the second highest since 1977.
Regionally, Saskatchewan was the only province to experience a sizable deterioration in the job market, losing 3,200 jobs. But the province still boasts Canada's lowest unemployment rate at five per cent.
The national unemployment rate was 8.7 per cent in August. Statistics Canada also released seasonally adjusted, three-month moving average unemployment rates for major cities but cautions the figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)
-St. John's, N.L. 8.2 (8.1)
-Halifax 6.4 (6.0)
-Saint John, N.B. 5.2 (5.0)
-Saguenay, Que. 9.3 (9.8)
-Quebec 5.1 (4.8)
-Trois-Rivieres, Que. 8.6 (8.3)
-Sherbrooke, Que. 7.6 (8.5)
-Montreal 9.6 (9.6)
-Gatineau, Que. 5.8 (5.4)
-Ottawa 5.2 (6.0)
-Kingston, Ont. 6.8 (7.2)
-Toronto 10.1 (10.0)
-Hamilton 8.7 (8.2)
-Kitchener, Ont. 9.9 (9.9)
-London, Ont. 11.1 (10.9)
-Oshawa, Ont. 9.9 (9.7)
-St. Catharines-Niagara, Ont. 9.9 (10.5)
-Sudbury, Ont. 10.6 (9.8)
-Thunder Bay, Ont. 8.7 (8.5)
-Windsor, Ont. 14.8 (15.2)
-Winnipeg 5.8 (5.3)
-Regina 4.1 (3.2)
-Saskatoon 4.5 (4.7)
-Calgary 7.1 (6.9)
-Edmonton 7.3 (7.0)
-Abbotsford, B.C. 9.0 (9.0)
-Vancouver 7.3 (7.0)
-Victoria 5.7 (6.1)
The national unemployment rate was 8.7 per cent in August. Here's what happened provincially (previous month in brackets):
-Newfoundland 15.6 (17.1)
-Prince Edward Island 13.7 (12.2)
-Nova Scotia 9.5 (9.2)
-New Brunswick 9.3 (9.4)
-Quebec 9.1 (9.0)
-Ontario 9.4 (9.3)
-Manitoba 5.7 (5.2)
-Saskatchewan 5.0 (4.7)
-Alberta 7.4 (7.2)
-British Columbia 7.8 (7.8)