Loonie gains more than a cent on strong jobs figures in U.S. and Canada

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The Canadian Press, On Friday May 6, 2011, 9:01 am
By Sunny Freeman

The Canadian dollar regained some ground Friday that it lost in the previous session as Canadian and U.S. job figures came in above expectations.

The loonie was up 1.10 cents to 104.38 cents US after a Statistics Canada report showed Canada's economy stepped up a gear in April, pumping out a surprisingly strong 58,300 jobs.

Almost all of the jobs were in the province of Ontario and a big portion of them part-time.The impressive gain in the headline number was enough to trim the unemployment rate to 7.6 per cent, down 0.1 per cent from the previous month, matching the lowest jobless level since the early months of the recession.

April's gains bring the year-over-year increase in employment to 283,000.

Although the headline number exaggerates the strength of the labour market, the monthly pick-up was nonetheless impressive.

Economists had expected a more modest 20,000 gain following a weak March, although they left themselves open to an upside surprise for possible one-time hiring for the federal election.

"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," said Douglas Porter, deputy chief economist at BMO Capital Markets.

"However, the details were not quite as impressive, and jobs may have got a least a small temporary boost from the election. As a result, this likely won’t make much impact on the Bank of Canada’s view of the world."

In the U.S., employers added more than 200,000 jobs in April for the third straight month, the biggest hiring spree in five years. But the unemployment rate rose to nine per cent in part because some people resumed looking for work.

The Labor Department says the economy added 244,000 jobs last month. Private employers shrugged off high gas prices and created 268,000 jobs — the most since February 2006.

The data suggests businesses are confidence in the economy despite weak growth earlier this year. Still, unemployment increased slightly from the 8.8 per cent in March. It was the first increase since November.

Meanwhile, commodity prices narrowed slides seen in Thursday trading.

Gold prices added $1.20 to US$1482.60 an ounce, while copper lost two cents to $4.01 a pound.

Crude prices lost $1.25 to $98.55 a barrel — extending a weeklong sell-off on investor concern that slowing U.S. economic growth will undermine demand for crude. That was down sharply from a 2 1/2-year high of almost US$115 late last week and the biggest one-day percentage drop in more than two years.