The Canadian economy churned out a better-than-expected 42,600 new jobs in November, Statistics Canada reported today. But the jobless rate rose slightly as more people entered the labour force.

Economists had expected only modest growth of 10,000 jobs.

The rosy jobs report boosted the Canadian dollar, as the market bet that future interest rate cuts would be less likely. The loonie was at US99.61¢ Friday , up more than half a cent from Thursday’s close.

The unemployment rate edged up to 5.9%, a rise of a tenth of a percentage point from October’s 33-year low.

So far this year, the country has created 388,000 jobs, making this year’s employment growth 2.3% — stronger than last year’s 1.8% increase.

StatsCan said most of the new job creation took place in the private sector, with growth concentrated in transportation and warehousing, business, building and other support services, educational services and natural resources.

But the manufacturing sector continued to feel the effects of a strong dollar, as another 16,400 factory jobs disappeared. November was the month when the loonie reached a modern-day high of US$1.10.

British Columbia led all provinces in job growth, adding 25,800 new payroll positions, mainly in construction. Quebec added 18,600 jobs.

Alberta again led all provinces with the lowest unemployment rate of 3.6%. But the other western provinces weren’t far behind — all had jobless rates of 4.2% or less.

The country’s employment rate the percentage of working-age people in the labour force — rose to another record high of 63.6%.

Wage pressures continued to build in November, with the average hourly wage up 4.2% year-over-year. That’s well above the 2.4% increase in the cost of living.

“This doesn’t change our view that the Bank of Canada will likely ease interest rates a couple of times in the new year,” said BMO Capital Markets in a morning commentary.

South of the border, the slumping U.S. housing market took a toll on hiring last month, though increases in services employment appeared to limit the risk of a severe economic downturn.

Nonfarm payrolls rose 94,000 in November, the U.S. Labor Department reported today, down from October’s 170,000 gain, which was revised up by 4,000. The unemployment rate was unchanged last month at 4.7%.

The modest employment gain will likely keep a third straight U.S. Federal Reserve interest rate reduction on track for next week, but it may limit the size of any cut as officials balance volatility in financial markets with some signs of resilience in labour markets.