The Canadian labour market surged in March, snapping a recent soft patch in employment in dramatic fashion, providing fresh evidence of Canada's strengthening economy.

Statistics Canada's monthly Labour Force Survey reported that total employment jumped 41,000 last month, more than reversing the two small declines in January and February. That brought the unemployment rate down to 7.1 per cent, after hitting a three-year high of 7.3 per cent in February.

Economists had anticipated a bounce-back in hiring from the sluggish figures of the first two months of the year, as economic indicators had generally shown that the economy was growing at a solid pace early in the year. But the gain was much bigger than the 10,000 jobs that economists, on average, had estimated.

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Some of the key details within the report underlined the strength of the March numbers. Private-sector employment surged 65,000; full-time jobs were up 35,000. And in Alberta, where labour market has been severely battered over the past year by the dramatic slump in oil prices, employment surged 19,000 in March, and the unemployment rate tumbled to 7.1 per cent from February's 20-year high of 7.9 per cent.

"GDP is roaring, and the labour market seems to be joining the party," Canadian Imperial Bank of Commerce economist Nick Exarhos said in a research note. "Chalk this up as another positive data point in a Canadian outlook that looks much brighter than it did a few months ago."

The Labour Force Survey (LFS) is Statscan's monthly poll of about 56,000 households, and provides the statistical agency's most timely measure of job growth and other key labour market characteristics. But like any survey, the LFS comes with a significant statistical margin of error – the March employment number is considered accurate plus-or-minus 29,800, two-thirds of the time – and as a result, the data are prone to month-to-month volatility. So while economists said the booming March jobs numbers underlined the recent indications of a stronger economy, they were hesitant to give the surprisingly strong result an unqualified stamp of approval.

"This is a welcome good news report for the economy, even if the jobs data are always a tad suspect. The upturn in jobs reinforces the point that growth did indeed improve early in 2016," said Douglas Porter, chief economist at Bank of Montreal, in a research note. "Still, we do not believe that the economy has suddenly transitioned to above-potential growth in a sustainable manner."

The one glaring sore spot in the March report was a loss of 32,000 jobs in the manufacturing sector, despite recent indications of strong sales growth this year. As a result of that weak number, goods-producing employment fell 34,000 in the month, partly offsetting a huge 75,000-job gain in services-producing industries.

"The big drop in factory jobs is a loud cautionary note in this release," Mr. Porter said.

"I think you always have to take one month in the Labour Force Survey with a dose of skepticism," said Toronto-Dominion Bank senior economist Leslie Preston, stressing that the overall trend in job creation over several months is a better way to gauge the health of the labour market.

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Even with the sizable gains in March, the Canadian economy added only an average of about 11,000 jobs a month in the first three months of the year – which is consistent with its monthly average over both the past six months and the past 12 months. While that growth trend is relatively modest by historical standards, it shows that Canadian employment has held up surprisingly well amid the Canadian economy's struggles through 2015.

"We have to acknowledge that the labour market has been more resilient than the Canadian economy over the past year," Mr. Exarhos said in an interview.

Indeed, some economists believe job creation has gotten ahead of the broader economy over the past six months, perhaps reflecting employers anticipating the pick-up in demand that may only now be taking hold. As a result, they said, job gains may moderate over the next few months, as economic growth plays catch-up to justify those hires.

"March was a good month for hiring, but we still expect the trend to remain modest," Ms. Preston said.