Canada Unemployment Falls as 108,000 Jobs Added

The Canadian economy added a record 108,700 jobs in April, more than four times the consensus forecast, the government reported Friday.

Statistics Canada said the gain was the biggest ever recorded by the agency in terms of the number of jobs, pushing the unemployment rate down to 8.1 percent.

Royal Bank Chief Economist Craig Wright called it a "shockingly large increase" and said it raises the odds Canada's central bank will raise interest rates on June 1. That could make Canada the first Group of Seven country to raise rates since the financial crisis.

The unemployment rate fell from 8.2 percent in March. The drop in the percentage was not as dramatic as the rise in the number of jobs added because more Canadians went looking for work.

The Canadian dollar surged more than three quarters of a U.S. cent to 95.79 cents after the announcement, reducing some of the losses from Thursday when the Canadian dollar dropped about 2 cents after Thursday's dramatic stock selloff.

Canada's economy, a resource-rich economy dependent on oil and other commodity prices, has emerged from the global downturn faster than the United States. Canada has not experienced the failure of any major financial institution, and there has been no crippling mortgage meltdown or banking crisis in Canada, where there is greater oversight of mortgages.

But Wright expects Canada's central bank to raises interests slowly from the record emergency low of 0.25.

"It's all adding up to a fairly buoyant Canadian recovery, but the cloud from Europe is still present, so when they do begin tightening it will be in modest increments rather than something more aggressive," Wright said.