Statistics Canada reported this morning in Toronto that employment north of the border increased for the second consecutive month in September, as Canada added 52,000 mainly full-time jobs. The unemployment ticked up to 7.4 percent from 7.3 percent, however, as 72,600 people joined the labor market.

It was the third-biggest monthly jobs gain of the year, and it was more than five times the 10,000 jobs analysts expected to be created. In August Canada added 34,000 jobs, but those were almost entirely of the part-time variety. On a year-over-year basis Canada has created 175,000 new jobs.

According to StatsCan most of the new jobs were taken by workers in the core 25-to-54 age group. And most were taken by men, in the first notable increase in employment for that gender since March 2011. “With this increase,” noted StatsCan, “the employment level for core-aged men is back to its pre-recession peak of October 2008.”

The biggest gains were in the retail and wholesale trade sectors, where 34,000 jobs were created. The number of construction jobs–a weak spot in recent months–rose by 29,000. Employment in the information, culture and recreation industries saw increased by about 24,000, while about 8,700 new agriculture jobs were created.

“Other services” posted a loss of 19,000 jobs, while business, building and other support services shed 17,000.

The Canadian dollar spiked on this additional evidence that the Great White North continues to weather the post-Great Recession recovery better than most–if not all–developed economies. As of midday the loonie was at USD1.0239, up from Thurday’s close of USD1.0200. The Canadian currency has appreciated 4.6 percent from its 2011 close of USD0.9789.

Bank of Canada Senior Deputy Governor Tiff Macklem, in a speech before the Winnipeg Chamber of Commerce, yesterday continued with the hawkish tone the BoC first adopted in its April 2012 interest rate policy statement.

“To the extent that the economic expansion continues and the excess supply in the economy is gradually absorbed,” said Mr. Macklem, “some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 percent inflation target over the medium term.” This language is basically identical to the language used in the BoC’s Sept. 5 rate announcement.

The BoC has held its key overnight rate target at 1 percent since mid-2010, but this year it resumed signaling its intention to tighten policy. This establishes a pretty stark contrast with the US Federal Reserve and the European Central Bank. And nowhere are there indications of  softening of its tightening bias; the Reserve Bank of Australia (RBA), effecting monetary policy in that other relatively strong developed-world economy, backed off of its hard line in September and this month announced a surprise, 25-basis point reduction to its benchmark cash rate, to 3.25 percent.

The BoC will make its next rate announcement on Oct. 23.

Mr. Macklen noted that employment had staged “a relatively quick recovery” and that “much of the slack in the labor market following the 2009 recession has been taken up.” But he also noted that “some slack remains.” Although a rate cut is unlikely in light of continuing slow growth in the US and the troubles plaguing Europe, neither is a rate increase on the immediate horizon.

According to the BoC growth has to exceed an annualized 2 percent for excess capacity to be absorbed. The central bank’s forecast for third-quarter growth is 2 percent; gross domestic product (GDP) expanded a revised 1.9 percent in the second quarter. Annual inflation in August was well below the BoC’s 2 percent target.

Bay Street Beat

The books are now closed on the last reporting season, as Student Transportation Inc (TSX: STB, NSDQ: STB) announced its fiscal 2012 fourth-quarter and full-year results on Sept. 26.

Following its report Student Transportation was downgraded by the Raymond James analyst covering the stock.

Raymond James now rates the stock “market perform,” down from “outperform,” and the 12-month target price is CAD6.75, down from CAD7. Student Transportation’s buy-hold-sell line is now two-three-one, with an average 12-month target price of CAD7.27 among the five analysts who provide one.

The school-bus services provider actually posted solid numbers. Full-year cash flow covered the fiscal 2012 dividend comfortably, with a payout ratio of 79.9 percent. That beat management’s prior guidance of between 82 percent and 85 percent. Profit margins were in line with fiscal 2011 despite higher fuel costs, reflecting management’s ability to eliminate direct exposure in most of its contracts as well as to cut costs in other areas such as by improving safety and reliability.

Student Transportation reported a 100 percent renewal rate for its contracts coming due in fiscal 2012. And it has consistently renewed 95 percent of its signature 15-year contracts, which are typically indexed to inflation.

We continue to rate Student Transportation remains a buy up to USD7 for those who don’t already own it.

New Canadian Edge Portfolio Aggressive Holding Poseidon Concepts Corp (TSX: PSN, OTC: POOSF) is also a favorite on Bay Street, as 11 of the 12 analysts who cover the stock rate it a “buy,” while EVA Dimensions, which marches to the beat of a different drummer, rates the stock a “sell.”

The average 12-month target price for Poseidon is CAD19.68, gathered from the 11 analysts who rate it a “buy.”

Raymond James has initiated coverage of Artis REIT (TSX: AX-U, OTC: ARESF) with an “outperform” rating and a CAD17 12-month target price. Artis now carries seven “buy” ratings and three “hold” ratings from the Bay Street analysts that cover it. The average among the nine who provide a 12-month target price is CAD17.83.

Byron Capital Markets has initiated coverage of Cineplex Inc (TSX: CGX, OTC: CPXGF) with a “buy” rating and a CAD31.50 12-month target price. Cineplex is rated “buy” by three analysts, “hold” by nine and “sell” by one. The average 12-month target price among the 10 analysts who provide one is CAD29.70.

Dundee REIT (TSX: D-U, OTC: DRETF) is off the “restricted” list at BMO Capital Markets, where it’s now rated “market perform,” or “hold” according to Bloomberg’s standardization of broker-speak. The 12-month target price is CAD39.

EVA Dimensions has raised its rating on Dundee from “hold” to “overweight.” EVA does not provide 12-month target prices with its recommendations.

Dundee is now on the “restricted” list at Cannacord Genuity Corp, CIBC World Markets, National Bank Financial and Scotia Capital.

Generally speaking, a restricted list is a current list of securities in which proprietary, employee and certain solicited customer transactions are restricted or prohibited. A restricted list is usually distributed periodically throughout a particular broker-dealer to make employees aware of those securities that the firm is restricted or prohibited from recommending and/or trading.

If a brokerage house has a restricted list that basically means it can’t recommend stocks appearing on it to clients, family or any other related party. The most common reason a brokerage house places a stock on its restricted list is that it’s involved in an investment banking deal with the company. It would therefore be unethical for the brokerage to discuss this company for buying opportunities.

Acadian Timber Corp (TSX: ADN, OTC: ACAZF) was downgraded from “neutral” to “underperform” at Credit Suisse, though the analyst covering the stock for the house maintained a 12-month price target of CAD12. “Underperform” translates to “sell” according to Bloomberg’s standardization of brokerage-industry lingo.

None of the four analysts who cover Acadian rate the stock a “buy.” Three rate it a “hold,” and the Credit Suisse downgrade makes it one “sell.”

ARC Resources Ltd (TSX: ARX, OTC: AETUF) was moved to the “restricted” list at Scotia Capital, which formerly rated the stock “sector outperform” with a 12-month target price of CAD27.50. ARC is now rated “buy” by four Bay Street houses, “hold” by 13 and “sell” by one, the outlier EVA Dimensions.

Fraser Mackenzie Ltd initiated coverage of PetroBakken Energy Ltd (TSX: PBN, OTC: PBKEF) with a “strong buy” rating and a CAD20 12-month target price. PetroBakken now has 17 “buy” ratings, five “hold” ratings and zero “sell” ratings on Bay Street. The average 12-month target price among the 19 analysts who provide one is CAD17.53.

Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF) was upgraded to “outperform” from “market perform” at BMO Capital Markets, and the 12-month target price was boosted to CAD26 from CAD24. Peyto is now favored by 13 of the 16 analysts who cover it, while one rates it a “hold” and two rate it a “sell” Its average 12-month target price is CAD26.20; 15 analysts provide a target price.

Credit Suisse has initiated coverage of Vermilion Energy Inc (TSX: VET, OTC: VEMTF) with a “neutral” rating and a CAD53 12-month target price. Vermilion’s buy-hold-sell line on Bay Street is now eight-six-one, with an average 12-month target price among 12 analysts of CAD52.04.

Wajax Corp (TSX: WJX, OTC: WJXFF) was upgraded to “market perform” from “underperform” at BMO Capital Markets, though the analyst covering the stock for the house maintained a CAD44 12-month target price. Wajax is now rated “buy” at four houses and “hold” at six, with zero “sell” recommendations. Nine of the 10 analysts who cover it provide a target price; the average is CAD50.39.

Here’s how the Canadian Edge Portfolio stands on Bay Street as we enter the next reporting season, which will comprise calendar 2012 third-quarter numbers for most Holdings. The number of analyst “buy,” “hold” and “sell” ratings for each company are shown, followed by the average 12-month price target among the analysts that provide such guidance.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–6–1–2 (CAD34.75)
• Artis REIT (TSX: AX-U, OTC: ARESF)–7–3–0 (CAD17.83)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–1–3–3 (CAD14.48)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–2–5–0 (CAD15.08)
• Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF)–0–1–0 (CAD13.75)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, OTC: BRPFF)–5–6–0 (CAD31.44)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–7–6–0 (CAD26.42)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–3–9–1 (CAD29.70)
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–2–5–0 (CAD21.21)
• Dundee REIT (TSX: D-U, OTC: DRETF)–4–1–0 (CAD41.55)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–4–2–0 (CAD10.70)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–7–2–2 (CAD12.25)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–4–7–1 (CAD11.48)
• Just Energy Group Inc (TSX: JE, NYSE: JE)–2–5–0 (CAD12.95)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–6–2–1 (CAD51.63)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–4–7–1 (CAD34.44)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–6–6–0 (CAD30.02)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–3–6–0 (CAD29.98)
• Shaw Communications Inc (TSX: SJR/B, NYSE: SJR)–4–11–2 (CAD20.92)
• Student Transportation Inc (TSX: STB, NSDQ: STB)–2–3–1 (CAD7.27)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–8–3–0 (CAD22.25)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–0–3–1 (CAD11.44)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–2–5–3 (CAD32.75)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–4–13–1 (CAD25.25)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–3–2–1 (CAD18.10)
• Colabor Group Inc (TSX: GCL, OTC: COLFF)–0–5–0 (CAD8)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–17–5–1 (CAD48.08)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–2–2–1 (CAD8.17)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–8–1–0 (CAD16.14)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–1–0–0 (CAD8)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–4–5–0 (CAD16.47)
• Pengrowth Energy Corp (TSX: PGF, NYSE: PGH)–7–9–2 (CAD7.98)
• PetroBakken Energy Ltd (TSX: PBN, OTC: PBKEF)–17–5–0 (CAD17.53)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–13–1–2 (CAD26.20)
• PHX Energy Services Corp (TSX: PHX, OTC: PHXHF)–1–12–1 (CAD9.65)
• Poseidon Concepts Corp (TSX: PSN, OTC: POOSF)–11–0–1 (CAD19.68)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–8–6–1 (CAD52.04)
• Wajax Corp (TSX: WJX, OTC: WJXFF)–4–6–0 (CAD50.39)