The strength of the Canadian labour market continues to surprise economists who were calling for slowdown in hiring. Over 42,000 new jobs were created in November, pushing the jobless rate down to 7.5%.

Economists couldn’t blame the big net gain on part-timers either. In fact, all the net jobs created in November were full-time positions (up 55,300). The manufacturing sector led the way with 33,100 new positions in November, bringing the year-to-date gains to 150,000. BMO Nesbitt Burns calls this result, “shockingly strong”. Overall, the year-to-date has seen more than half a million new jobs created. Bank of Montreal says that the pace of job creation this year is more than three times faster than normal.

TD says that today’s report, “was beyond the wildest dreams of the most diehard of optimists”. And, “No matter which way you churn, mash and grind this morning’s numbers, Canada’s labour market remains rock-solid — and although the Bank of Canada is in no hurry to raise interest rates, today’s data will certainly prevent it from dozing off.”

CIBC World Markets says that the size of today’s upside surprise, combined with the impressive quality of the new positions, has improved the outlook for Canadian growth. “While a sturdy increase in hours worked has obvious implications for Q4 output, the hiring binge will also help support consumption early in the new year.”

RBC Financial Group economists says that the increase in participation rates is the other important story from today’s release. “Participation rates have been trending higher all year and last month rose to a new 12-year high of 67.3%. This means that the supply of labour has kept pace with labour demand keeping the threat of wage-price inflation contained.”

“The steady diet of strong Canadian employment gains simply refuses to let up, setting a favourable backdrop for consumer confidence and income heading into the heart of the key Christmas season. While U.S. sales will likely be so-so, the outlook for Canadian retail sales looks much firmer. The solid job gains will also revive the debate over when the Bank of Canada will start tightening again — next spring still lurks as a possibility,” concludes Nesbitt.

Bank of Montreal says that, “The strong employment report raises the risk of the Bank of Canada tightening a little sooner than we currently expect. However, given the likely slowing in GDP in the fourth quarter, still tentative signs of a strengthening US economy, and ongoing geopolitical concerns, the Bank will likely wait until March before tightening.”

“True, employment developments are hard to ignore, but with negligible wage pressure and a Fed inclined to offer additional rate relief, the Bank of Canada can still afford to wait and see on further rate hikes, given evident global weakness,” offers CIBC.