"Home building is slowing, suggesting that it's not sustainable for construction employment to maintain its record share of total employment"
-Benjamin Reitzes, senior economist at BMO Capital Markets
The Canadian Dollar soared versus major peers on Friday after report from Statistics Canada showed the unemployment hit the lowest level in almost five years in September, even though the main driver is not suggesting bright prospects. The overall jobless rate dropped to 6.9% from 7.1% in August, the lowest level since December 2008. The majority of analysts, however, expected no change. The economy created only 11,900 jobs over the corresponding period, down from 59,200 in August, as 21,400 workers aged between 15 and 24 left the labour force.
Economy's inability to create enough jobs as well as signs of discouraged workers are sending worrying signs to the Bank of Canada, which lowered its growth forecast last week. Amid signs of a possible slowdown, the central bank kept its key lending rate at 1% since December 2010 and may cut it further, in order to encourage investment and spending. Furthermore, consumer sentiment climbed to the highest since March 2011, as employment increased, while the housing market remained buoyant.
Despite gloomy news, the IMF claimed that Canada should withstand a sharp drop in emerging-market growth, even though Canada stuck at a low level of growth this year and in the next one.
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