By David Ljunggren

OTTAWA, (Reuters) – The Canadian economy saw a massive jobs increase in September. This pushed employment back to pre-pandemic levels and the unemployment rate fell to an 18-month low. Statistics Canada data showed this on Friday.

Analysts stated that the numbers showed recovery from COVID-19 was picking up pace, but they predicted that the Bank of Canada would need to see continued evidence of strength before it adopts a more aggressive position on when interest rates will be raised.

Statistics Canada reported that there was a net gain in employment of 157.100, with all these jobs being full-time. In February 2020, the unemployment rate was at its lowest point since February 2020.

Reuters analysts polled had predicted that 65,000 more jobs would be created in September. The country’s unemployment rate would also fall from 7.1% to 6.9%, according to Reuters.

Statscan stated that Canada has returned to levels of employment before last year’s COVID-19 panic. The country had lost 3 million jobs during the crisis.

Jimmy Jean (chief economist at Desjardins Group), said, “It is very solid” and that Canada’s fourth wave has been performing well. The central bank may announce that its quantitative easing program will be tapered later this month.

Full-time jobs saw all the gains. They posted a 193,600 job increase and were evenly split between public and private sector. Part-time jobs were eliminated by 36,500.

Bank of Canada cut interest rates to an all-time low of 0.25% in 2017. It said it would not raise them again until it has seen the economy absorb excess slack. This is expected to happen during the second half of 2020.

Due to the population increase, 276,000 additional people remain unemployed as compared with February 2020.

Andrew Kelvin (chief Canada strategist, TD Securities) stated that the Bank of Canada will continue to seek improvement because the goal of the Bank of Canada’s is not to return to pre-pandemic job numbers, but to get back at the prepandemic population ratio.

At 1.2490/greenback (80.06 U.S.cents), the Canadian dollar reached its highest level since August 11. This was an increase of 0.5%. In separate news, U.S. job growth was much lower than forecast in September according to data.

Royce Mendes is a senior economist with CIBC Capital Markets. He noted that although hours worked increased 1.1%, they remained 1.5% lower than pre-pandemic.

In a note, he stated that the headline print “likely seals the deal to another taper of the Bank of Canada late this month but there are still many ways to go for the labor market to fully heal”