Canada: Canada beats forecasts with job surge and trade surplus

The economy created an unexpected net gain of 53,700 new jobs in December 2016, boosted by a rebound in full-time work. The increase brought the total employment gains for 2016 to 214,000, according to official figures from Statistics Canada. Full-time jobs rose 81,300 during the month, offset by a loss of 27,600 part-time positions. The unemployment rate, however, increased from 6.8% in October to 6.9% in November, as more people entered the labour market.

The country also posted a trade surplus of $526 million in November - its first in more than two years. This is following a $1 billion deficit in the previous month, as exports surged and imports posted only a modest gain. Exports rose by 4.3%, the greatest increase since June 2015, thanks to higher shipments of metal and non-metallic products together with record exports to countries other than the United States. Imports grew by 0.7%, largely boosted by higher imports of energy products. The trade surplus with the United States - Canada’s biggest trade partner - also rose to $4.2 billion from $3.2 billion in October.

Economists expect the surprisingly strong employment and export data to bolster broader economic growth in 2017. However, the Bank of Canada Governor, Stephen Poloz, has stressed ahead of his January 18 rate decision that signs of slack in the labour market still remains, which may be adding to divergence with a recovering U.S. economy.

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