Julie Gordon, Ismail Shakil

(Reuters] – Canada saw a huge job increase in February that easily surpassed expectations. However, Statistics Canada reported Friday that the unemployment rate was below pre-pandemic levels.

According to data, the economy created a net of 336,600 new jobs. This is more than twice what 160,000 economists had predicted. Canada was freed from Omicron restriction, and the jobless rate dropped to 5.5%.

The number of hours worked jumped 3.6% to February 2020, surpassing the February 2020 level for the first-time. Overall employment is now 1.9% higher than pre-pandemic.

Doug Porter (chief economist, BMO Capital Markets) stated, “Obviously economists expected a rebound but clearly it wasn’t of this magnitude.”

Although part-time employment accounted for approximately two-thirds the gains, it was still impressive to observe a month in which hours worked increased by 3.6% and that the unemployment rate threatened a new low.

The full-time workforce grew by 121 500, and 215,100 jobs for part-time workers were created. Average hourly earnings for permanent employees increased 3.3% over the previous year.

As the Bank of Canada prepares to raise its interest rate at its next April meeting, it is widely believed that this will result in a jobs boost. There is a 70% chance that the quarter-point rate will rise to 0.5%. 30% of money markets are betting on a move at 50basis points.

Canadian dollars traded 0.4% lower at 1.2720 against the greenback (or 78.62 U.S.cents).