OTTAWA: Canada added far more jobs than expected in February, while the unemployment rate dropped to its lowest point since March 2020, Statistics Canada data showed on Friday.

With the addition of 259,200 jobs in February, Canada recouped nearly all the losses of the previous two months and beat the average analyst prediction of 75,000 new jobs.

Employment remains 3.1% below pre-pandemic levels, while the number of long-term unemployed fell by 9.7% from a record high of 512,000 in January.

"A lot of this is the January numbers reversing, but there were also some full-time jobs being added, which shows improvement in the economy," said Andrew Kelvin, Chief Canada Strategist at TD Securities.

"It's a very positive set of numbers, and suggests a quicker recovery for the broader economy."

The gains were driven by the reopening of businesses as COVID-19 restrictions were loosened across much of the country. Statistics Canada said nearly all the job gains were among lower-wage workers, those making C$25 ($19.95) per hour or less.

Analysts said the blockbuster job gain shows that excess capacity is closing far faster than the Bank of Canada's (BoC) expectations.

"I would be surprised if they (BoC) don't signal fairly soon that they are starting to back further away from their bond purchase program," said Derek Holt, vice president of capital market economics at Scotiabank.

The Bank of Canada has made clear that even as other parts of the economy rebound, it remains very concerned about the high number of people still out of work because of the pandemic.

The Canadian dollar strengthened to 1.2512 to the greenback, or 79.92 US cents, after the data.