Spurred by a large gain in full-time jobs, Canadian employment rose by an estimated 46,000 in September, following slight declines in the previous two months.

Statistics Canada reports that he unemployment rate was unchanged at 8% as the gain in employment was matched by a similar increase in the number of people entering the labour force.

An increase of 37,000 full-time jobs in September more than offset a decline in full-time employment the month earlier. So far in 2003, employment has increased by 98,000 (+0.6%), all in full-time jobs.

The stronger than expected report has economists forecasting that the Bank of Canada will stand pat on interest rates next week.

“Most of the details of the report were every bit as strong as the headline,” says BMO Nesbitt Burns “The gains were broadly based across industry sectors, and most of the increase was among adult workers.” Nesbitt notes that most of the job gains last month were in Ontario, and the private sector led the way.

“The only real exception worthy of mention is the battered manufacturing sector, which lost another 15,300 jobs in September,” says TD Bank.

Nesbitt notes that the manufacturing sector is the most affected by the surging loonie, “and is likely to remain the weak spot”.

TD also says that the unchanged jobless rate is good news because it indicates that labour force participation rate also jumped to 67.6% — its highest level on record, “and arguably a sign of continued optimism on the part of job seekers.”

TD says the September numbers confirm “the Canadian economy is not on the verge of collapse — and definitely, leave little chance of a Bank of Canada rate cut next week.”

“Emboldened by a hearty wave of job creation, on top of a handful of other supportive economic releases, the Bank of Canada now looks to delay its next round of interest rate relief till year-end,” predicts CIBC World Markets.”

However, economists also warn that this jobs report may be the exception for the rest of the year. “Make no mistake about it, though — Canada’s job market is still not out of the woods. Canada’s export sector is still being battered by the strength in the Canadian dollar, which will continue to weigh on manufacturing.,” TD cautions.

“Compared to lean U.S. payrolls, Canada’s labour market looks flabby, with an erosion in relative productivity suggesting cautious hiring in months ahead,” concludes CIBC.