Investing.com - The Canadian labor market stayed tight in January, with a surge in employment that far surpassed expectations and smoothed the path for further interest rate increases from the Bank of Canada.
The number of people in work in Canada rose by 66,000 in January, according to Statistics Canada, far above December's rise of 9,300 and a consensus forecast for a rise of 8,000.
The agency also reported a sharp rise in the number of people looking for work. That led the overall workforce to expand, which also pushed the unemployment rate up to 5.8%. That was slightly higher than the 5.7% expected. The jobless rate had hit a four-decade low of 5.6% in November and stayed there in December.
The Loonie rose sharply on the news, rising nearly a cent against the U.S. dollar and reversing much of its losses on dovish talk by central bank governor Timothy Lane earlier in the week.
Lane had warned that uncertainties over U.S. trade policy were clouding the economic outlook north of the border too.
The central bank has raised interest rates by 1.25 percentage points since July 2017 but did not raise rates at its last meeting on Jan. 9. Analysts expect it to keep rates steady on March 6.
Earlier Friday, fresh data had showed the Canadian housing market also appearing to regain momentum after a sharp slowdown in the second half of last year. Housing starts rose by 208,000 in January, above expectations for 205,000. That news followed a report showing that building permits hit their highest level in a year and a half in January.