Canada churns out 93,000 new jobs

Canada's unemployment rate dipped below eight per cent in June for the first time in more than a year.

Statistics Canada said Friday the economy added a whopping 93,200 jobs in June, almost all of them in Ontario and Quebec.

The unexpectedly large number of jobs that were added dropped Canada's unemployment rate to 7.9 per cent.

"I'm flabbergasted another blockbuster gain," TDeconomist Derek Burleton said.

"It really does speak to the strength of the domestic economy."

The loonie gained nearly a cent on the news, trading at 96.74 centsUS after the report came out at 7 a.m. ET,up 0.95 of a cent US.

Forecasts had predicted between 15,000 and 20,000 jobs would be added and that the national unemployment rate would be stable at 8.1 per cent.

The agency said the new jobs were evenly split between full time and part time. The private sector was responsible for 51,900 of the new positions.

The gains mean that in less than a year, Canada has almost made up all the jobs lost during the recession that began in the last quarter of 2008.

Canada'sjobs marketlost 417,000positions between late 2008 and mid-2009.

With the 93,000 jobs added in June, Canada's economy has added 403,000 jobs since the middle of 2009 only 14,000 jobs short of its pre-recessionary peak. The economy has added 246,200 jobs in the last four months alone.

Regionally, eight of 10 provinces posted employment gains, but strength was centralized in Ontario, which added more than 60,000 jobs, and Quebec.

The strong showing adds credence to the theory that the Bank of Canada will move to hike its benchmark interest rate for the second straight time at its next policy meeting on July 20.

The central bank is likely to hike rates at its next meeting, but how much and how many more times after that is up for debate.

"This economy is not as strong as it's perceived to be," CIBC economist Benjamin Tal said. "The Bank of Canada will have to be careful to not hike rates too high, too quickly."

But despite the strong showing, there are threats to Canada's economy below the surface.

"There are cracks showing on the international front, as the U.S. is slowing down quite significantly," Burleton said.

"Our employment market seems to have a mind of its own."

Tal agreed, noting that employment in the keymanufacturing sector actually decreased during the month, and the topline figurewas buoyed by a deluge of 60,000 new jobs in Ontario that were likely G20-related and unlikely to continue.

"These 90,000 jobs will not last," Tal said. "[The figure]was exaggerated by the G20."