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A construction worker overlooks the site of the CIBC Hamilton Pan Am Soccer Stadium in Hamilton, Ont., Thursday, November 14, 2013.


Canada's jobs market thawed in March as the pace of hiring caught up to modest economic growth.

The economy added a better-than-expected 42,900 jobs in March, after months of stagnant employment growth, as young people landed work and the public sector added to the head count.

The job gains, the largest in seven months, sent Canada's jobless rate down one notch to 6.9 per cent. But smoothing out the monthly volatility, overall job growth in Canada has been "subdued" since August of last year, Statistics Canada said Friday. The six-month average for monthly job gains rose to a still-muted 10,000 from 3,000 in the prior month.

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"We need more data to really see if this is a trend," said Derek Holt, Bank of Nova Scotia's vice-president of economics, adding that sharp swings in public-sector employment in recent months "raise some red flags," while the quality of job gains, which tilted toward part-time work, suggest it's too early to declare the labour market has turned the corner.

Still, Canada's economy strengthened in the second half of last year, and separate reports have illustrated how gross domestic product bounced back in January, shaking off the effects of a major ice storm, while trade data also showed a rebound in exports. The March growth in hiring shouldn't be too surprising, given that employment growth had been unusually weak relative to GDP.

"As such, some catch up in job growth was in store," said Toronto-Dominion Bank deputy chief economist Derek Burleton.

Details of the jobs report were soft. Part-time positions rose by 30,100 in March while full-time jobs grew by 12,800. The country's participation rate stayed at 66.2 per cent, its lowest level since 2001.

The public sector has seesawed in recent months, adding 39,300 positions in March after a slide of 50,700 jobs in February. The private sector added just 3,900 positions last month. In the past year, employment growth has come from the private sector while the public sector has been flat.

Manufacturing was another weak spot, shedding 9,200 jobs, while agriculture cut 12,400 positions.

Wage growth eased to 2.2 per cent from a year earlier, suggesting the one-month pickup in the labour market is not yet generating inflationary pressure. Wage increases are still below the 2.3-per-cent average gain over the past three years, though above the rate of inflation, noted Bank of Montreal chief economist Douglas Porter. "That's enough of a real increase in wages to help provide some moderate support for consumer spending, but light years away from presenting a clear and present danger to higher inflation."

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The concentration of part-time positions, a low participation rate and still-muted wage growth "are not healthy signals of a hot jobs market," said IHS senior principal economist Arlene Kish.

By province, British Columbia saw a bump in hiring last month, which lowered its jobless rate to 5.8 per cent from 6.4 per cent. Employment also rose in New Brunswick and Quebec. Among cities, Resource-rich Regina has the country's lowest unemployment rate at 3.7 per cent while manufacturing-heavy Peterborough, Ont., has the highest at 11.2 per cent.

The broadest measure of unemployment, which includes discouraged workers and those working part time who would rather be full time, fell to 10.7 per cent – lower than the 11.2-per-cent rate in the same month last year, though still above pre-recession levels.

Young people benefited from the majority of last month's job gains, with their employment rising by 32,500. Youth in Ontario and Quebec led the gains, and by sector most of the positions were in health care and food services, data show. Still, more young people were out searching for work, leaving their jobless rate unchanged at 13.6 per cent.

An improving economy is prompting healthy fast-food chain Freshii to expand. Chief executive officer Matthew Corrin says the Toronto-based company plans to hire almost 500 people in Canada this year, in Toronto, Edmonton and Winnipeg.

He's looking for workers to prepare and deliver meals and do kitchen prep and is drawing from three available pools of labour – young (and more transient) Gen Yers, immigrants and people with disabilities ("some of our most loyal, hard-working and tenured employees.")

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"We see no sign of our pace slowing down," he said, with the economy picking up, banks more willing to lend and consumers opting for more healthy meals.

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