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INSTANT VIEW 3-Canada surprises with 52,100 new jobs in Sept

TORONTO, Oct 5 (Reuters) - Canada's economy added a higher-than-expected 52,100 jobs in September, largely due to a spike in full-time work, according to Statistics Canada data released on Friday.

� LINKS: Story: Web: COMMENTARY PAUL FERLEY, ASSISTANT CHIEF ECONOMIST, ROYAL BANK OF CANADA

"Much stronger than expected, in terms of the overall increase and positive news in that the increase was skewed towards full time versus part time employment ... Now the issue is in terms of how much of a payback will we see in October after two months of what look like outsized increases."

"Certainly it dispels some of the concern through the second quarter where we were getting some indication of maybe a stalling in job growth, these last two months have put to rest those concerns. Though going forward into October, you'll probably see some correction in terms of the outsized gains you've seen in August and September."

"In terms of the Bank of Canada, certainly it will take some encouragement from the strong gains in employment ... we've just seen too much volatility in terms of employment. I don't think they are going to take this on its own as an indication of the labor markets bouncing back."

"With the Canadian numbers coming in stronger than expected, it will probably be supportive of the Canadian dollar."

MAZEN ISSA, MACRO STRATEGIST, TORONTO-DOMINION BANK

"It's a little difficult to square the circle on this one, just given that you have an economic situation where you have generally soft domestic demand and subdued global growth, yet businesses still have a strong appetite for hiring."

"So whether or not this will persist over the coming months, I'm not sure about that. I think there's a strong possibility that maybe some of that hiring has been pulled forward into September."

"It will definitely be welcomed by the Bank of Canada, but I don't think it will change the Bank's thinking."

DOUG PORTER, DEPUTY CHIEF ECONOMIST, BMO CAPITAL MARKETS

"Surprising, in a word. It some ways the Canadian number is almost the polar opposite to the U.S. number. Flashy job gain but a little bit of sour news on the unemployment side because the participation rate went up so much. I think the key point here is the economy is still churning out jobs at a healthy pace. I wouldn't read too much into the month-to-month number but it's impressive and it is not reversing a big decline the prior month, so we can't brush this aside."

"The Bank (of Canada) is still talking a fairly tough games. What they are concerned about is the economy growing faster than potential. The rise in the unemployment rate would suggest maybe not -- and most of the GDP numbers haven't suggested that things are growing faster than 2 percent. So I'm sure there will be some market reaction but I don't think this is going to alter the bank's view dramatically."

"I think the combination of figures is unambiguously positive for the Canadian dollar. On the Canadian side you've got a rip-roaring headline job increase and on the U.S. side you've got a plunge in the unemployment rate and a strong household number. I think the combination is pretty positive for the Canadian dollar."

MARKET REACTION

- The Canadian dollar strengthened to a 10-day high of C$0.9764 to the U.S. dollar, or $1.0242, soon after the U.S. and Canadian data was released, compared to C$0.9810, or C$1.0194, minutes earlier.

- Overnight index swaps, which trade based on expectations for the central bank's key policy rate, showed that traders increased bets on a rate hike in 2013.

(Reporting by Andrea Hopkins, Allison Martell and Julie Gordon; Editing by Jeffrey Hodgson)

((jeffrey.hodgson@thomsonreuters.com)(+1 416 941 8099)(Reuters Messaging: jeffrey.hodgson.reuters.com@reuters.net))

Keywords: CANADA ECONOMY/JOBS