Photo by Dalibor Levíček

Canada’s gain of 58,000 new jobs in April surpassed all expectations. The unemployment rate dropped by 0.1% to 7.6%, according to a new Statistics Canada release. Economists claim that the Bank of Canada will raise interest rates.

Economists had expected a modest growth of 20,000 jobs in April, following small gains in March and February. But 58,000 jobs, more than twice what was expected, were an incredible surprise. There were gains in finance, insurance, real estate and leasing, business, construction, and other support services. Other industries remained essentially unchanged. “With April’s slight gain, full-time employment has returned to the level of October 2008 for the first time,” said the report. “The total number of hours worked, however, remained 0.6% below its October 2008 level.” The year-over-year increase in employment was 283,000, a bump of 1.7%. The fastest employment growth (at 7.7% since April 2010) was in transportation and warehousing. Alberta has the highest employment rate (68.8%) and Saskatchewan has the lowest unemployment rate (5.2%).

Douglas Porter, deputy chief economist for BMO Capital Markets, wrote: “April’s headline result is certainly impressive, and suggests that the Canadian recovery is managing to grind forward despite the many slings and arrows flung at the North American economy in recent months. However, the details were not quite as impressive, and jobs may have got at least a small temporary boost from the election.”

Economists expect the Bank of Canada to respond to these results and begin hiking interest rates in the second half of the year. Avery Shenfeld, chief economist at Bank of Nova Scotia, confirmed in his note that with the healthy labour market, the Bank should start raising rates in July.