TORONTO — Canada’s economy continues to outshine other advanced countries as the unemployment rate unexpectedly dipped below 8 percent for the first time in a year and half.
Statistics Canada said today the country added a higher-than-expected 93,000 jobs in June and said the unemployment rate dropped to 7.9 percent.
Economists had expected a more modest 15,000 to 20,000 job increase and that the rate would remain at 8.1 percent. It’s the second biggest gain ever recorded by the agency in terms of the number of jobs and comes after Canada added a record 108,700 jobs in April and 24,700 in May.
The government said the new jobs were evenly split between full-time and part-time positions.
In less than a year Canada has made up nearly all the jobs lost during the recession.
“We’ve replaced those jobs already. It is quite something how we are rebounding,” said Dawn Desjardins, assistant chief economist at Royal Bank.
Desjardins said low interest rates, a stable banking system and the government’s comparative strong fiscal position has spurred the recovery. Although its deficit is currently at a record high, the International Monetary Fund expects Canada to be the only one of the seven major industrialized democracies to return to surplus by 2015.
Canada entered the global downturn in the last three months of 2008 and withstood the global economic crisis better than most developed countries. There was no mortgage meltdown or subprime lending crisis in Canada where the financial sector is dominated by five large banks.
Last month, Canada became the first Group of Seven nation to raise interest rates since the crisis. Economists said the strong jobs report provides further impetus for the central bank to raise rates again on June 20.
“Given the strength of the banking sector and the domestic economy once the financial crisis began to dissipate, confidence among employers was very quick to respond whereas in the U.S. there are signs that confidence remains quite shaky,” said Derek Burleton, Deputy Chief Economist at TD Bank.
The Canadian dollar rose sharply following the jobs report, up 1.24 U.S. cents to 97.03 cents.