OTTAWA (Reuters) - Canada's recent employment boom picked up speed again in February when 55200 jobs were created -- a number far higher than analysts had predicted.
Analysts, who had been expecting to see more signs of weakness in Canada following a loss of 2,100 jobs in January, were surprised by the Statistics Canada report, which means about 613,000 jobs have been created since January 2002.
"I am flabbergasted, I am quite simply flabbergasted. It seems like you can throw anything in the path of Canada's job creation machine and it just keeps on going," said Marc Levesque, senior economist at Toronto-Dominion Bank.
"This just illustrates the fact that the Canadian economy may be softer than it was at certain periods last year but it's still holding up pretty bloody well."
Analysts had expected an increase of 12,000 jobs in February. A rise in the number of people seeking work kept the unemployment rate at 7.4 percent, as predicted.
The Canadian dollar was off session highs at C$1.4660 to the U.S. dollar, or 68.21 U.S. cents, early on Friday afternoon. Earlier in the day, it had hit its highest level against the U.S. dollar since April 2000 due to the strong Canadian jobs figures, combined with a sharp drop in U.S. payroll numbers.
"(This is) another impressive report. I think we're continuing to see upside surprises with the exception of the January numbers but even that, underlying the surface was pretty good news," said Craig Wright, chief economist at the Royal Bank of Canada.
He said the February figures reflected "ongoing support for the domestic side of the economy, suggesting good news ahead as soon as this uncertainty eases -- particularly with what's going on globally and in the U.S."
Flying in the face of the Statscan jobs report was the Ivey purchasing managers' report, whose employment index eased to 50.5 in February from 52.1 in January.
But, the overall index, broadly similar to the Institute of Supply Management index in the United States, showed purchasing activity rose to 59.2 last month from 56.3 in January.
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Statscan said 27,500 full-time and 27,700 part-time jobs were created in Canada in February, when the labor participation rate was 67.5 percent -- equaling the 13-year high set in December 2002.
The manufacturing sector gained 21,100 jobs while the construction sector lost 5,400 jobs.
"We've resumed the pattern of being surprised on the upside in terms of gains and their strength and job creation in the Canadian economy," said Paul Ferley, assistant chief economist at Bank of Montreal.
The average hourly wages of permanent employees, watched closely by the Bank of Canada as a sign of future inflation pressure, rose by 2.09 percent from February 2002 after annual rises of 1.89 percent in January and 1.9 percent in December.
In a move which surprised some observers, the Bank of Canada this week raised interest rates for the fourth time in less than a year in a bid to curb growing inflation.
"This is going to silence at least the harshest of the Bank of Canada's critics. It's going to be hard with these numbers to have people seriously come out there and say the Bank of Canada made a mistake," said Levesque.
Employment in the finance, insurance, real estate, leasing, healthcare and public administration sectors continued to increase. while jobs were cut in the transportation and warehousing sectors.
Eight of Canada's 10 provinces showed an increase in employment, with the only decreases coming in Nova Scotia and Alberta. Ontario and Quebec -- which between them account for more than half the country's gross domestic product -- saw gains of 0.2 percent and 0.3 percent respectively.
(With additional reporting by Amran Abocar in Toronto)
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