09:03 AM EST, 02/07/2025 (MT Newswires) -- Employment across Canada rose 76,000, tripling the consensus estimate for a 25,000 increase, said Desjardins following Friday's Labour Force Survey (LFS).

With the strength in hiring coming despite a further slowdown in population growth, it was enough to push the unemployment rate down one tick to 6.6%, noted the bank.

Adding to the good news, all of the employment gains came in the private sector, with the public sector shedding 8,000 jobs, pointed out Desjardins. Manufacturing employment led the way higher, which could potentially be tied to United States buyers stockpiling inventories ahead of trade tariffs, but it's difficult to confirm that hypothesis.

Total hours worked in the economy rose a "robust" 0.9%, bumping up the bank's very early tracking for Q1 gross domestic product to 2.0% from roughly 1.5% previously.

Given Bank of Canada Governor Tiff Macklem's "somewhat" hawkish comments later Thursday and the strength in labor market conditions seen Friday, the BoC might choose to hold rates steady in March should no tariffs be implemented before then, according to Desjardins.

That said, with inflation holding steady around the 2% target and wage growth cooling to an annual pace of just 3.5% in Friday's numbers, the good news is that central bankers have some flexibility to respond if a shock hits the economy.

Rates have risen across the Government of Canada yield curve and the Canadian dollar (CAD or loonie) has appreciated in light of the surprisingly strong data, added Desjardins.