Source: The Canadian Press

Canada is pumping out jobs at an spectacular pace, outstripping most of the industrial world and the economy as a whole.

Statistics Canada said Friday that the economy had created a whopping 93,200 new jobs last month — almost all in Ontario and Quebec and all in the services sector.

That took the country’s unemployment rate below 8% for the first time since the depths of the recession in January 2009, and now stands at 7.9%. That is in contrast to a June retreat in jobs in the United States and flat readings through most of the other G7 nations.

The report was so strong that some economists raised questions about its accuracy.

“That was a shocker for sure,” said Derek Holt, vice president of economics with Scotia Capital. “I am skeptical that Canadian businesses are so optimistic that they would be heaping on jobs at this stellar rate.”

However, he added that without evidence to contradict the jobs report it would “take a heck of a lot of fancy footwork by the Bank of Canada to dance around a rate hike on July 20th.”

Many expect bank governor Mark Carney to boost the central bank’s key rate one-quarter point to 0.75% — still a low level by historical standards.

Carl Weinberg of U.S.-based High Frequency Economics said the report supports the central bank’s view that the jobless rate could return to levels low enough to boost wages and inflation.

“The difference between us and them is that we do not believe this strong employment growth can last.”

According to Statistics Canada, the economy, which has been visible slowing this spring, has managed to create 227,000 new jobs in just past three months, and has now all but recouped the jobs losses of the 2008-2009 recession.

But the agency noted that the unemployment rate remains well elevated above the 6.2% that existed in October 2008 because many more Canadians have since joined the labour force.

The Canadian dollar took off after the jobs report. It was up 1.06 cents from Thursday’s close, rising to 96.85 cents US at midmorning.

There were a number of surprises in the Statistics Canada report, and a few notable weaknesses.

Economists had expected a modest pick-up of between 15,000 and 20,000 added jobs because several economic indicators, including retail sales, exports and building permits, have been weak since March.

The other surprise was that the jobs were all concentrated in Ontario and Quebec, despite the fact that the manufacturing sector actually shed workers during the month.

Ontario gained 60,300 workers, slicing the unemployment rate in Canada’s most populous province by 0.6 points to 8.3%.

Meanwhile, neighbouring Quebec gained 30,400 new jobs, bringing its unemployment rate to 7.8%.

These improvements were accomplished without any help from the manufacturing sector, a mainstay in both provinces, as factories shed 14,300 jobs overall in June.

All of the new jobs were in the services, including retail and wholesale trade, business building and other support services, health care, social assistance and other services, such as auto repair and personal care.

The agency said the new jobs were split between full-time and part-time, with more than half private sector.

There was also a big increase in student employment — 63,000 more last month than was the case in June last year.

However, there were 10,200 fewer working in the goods producing industries last month, with losses in the factories sector leading the way.

As well, labour economist Erin Weir of the United Steelworkers pointed out that despite more people working, total hours worked actually declined in June.

And wage growth was anemic at best, rising 1.7% and only 0.8% in Ontario, perhaps a reflection that the employment gains were in the lower-paying services category.