TORONTO -- The Canadian dollar surged Friday following data that showed job gains were eight times better than expected last month, as stock markets on both sides of the border stumbled amid the latest developments in the Trump-Russia probe.

The loonie closed at an average trading price of 78.56 cents US, up 0.97 of a U.S. cent, after Statistics Canada said the economy added 79,500 jobs in November -- blowing past the 10,000 that economists had expected.

The wave of job creation last month knocked the unemployment rate down to 5.9 per cent, its lowest level in nearly a decade.

"It's a shockingly good number. It's taken everyone by surprise and investors as well," said Patrick Blais, a managing director and senior portfolio manager at Manulife Investments.

However, he added, "the first impression would be it's a positive development, but if you look through the numbers it's a number that points to Canada's reliance on consumer spending."

Blais said he wasn't surprised to see the loonie react to the jobs data because it puts interest rates back on the agenda -- maybe sooner rather than later.

"At the end of the day, it's one of the major tools that can be used to temper some of the excesses in the market, and to see consumer spending stay this resilient and for people to tap into their savings is in itself worrisome," he said. "It's probably a reason for the Bank of Canada to consider another rate rise to temper those drivers."

The central bank has raised its benchmark rate twice since July and experts predict it's likely to continue along a gradual hiking path.

South of the border, it was a roller-coaster day on Wall Street after stocks fell sharply following news that former national security adviser Michael Flynn pleaded guilty to lying to the FBI about his contacts with the Russian ambassador, and said he would co-operate with the probe into Russian meddling in the U.S. presidential election.

U.S. stock indexes later recovered somewhat from the steep morning slide after Senate Republicans signalled they have enough votes to push forward on Donald Trump's tax overhaul bill. The legislation would slash the corporate tax rate, offer more modest cuts for families and individuals and eliminate several popular deductions.

The Dow Jones industrial average fell 40.76 points to 24,231.59. The S&P 500 index inched back 5.36 points to 2,642.22 and the Nasdaq composite index was down 26.38 points to 6,847.59.

The political uncertainty weighing on U.S. stocks also had a trickle-down effect on Canadian markets after the Toronto Stock Exchange lost ground following a positive start to the day.

"With the data points today you would have expected Canadian markets to be up and gain some momentum, but it's just following through with the general sell-off in the U.S. markets," Blais said.

The S&P/TSX composite index was down 28.51 points to 16,038.97, with a bullish energy sector the lone bright spot as investors priced in Thursday's news that a 24-nation alliance led by Russia and OPEC member Saudi Arabia agreed to prolong crude output cuts until the end of next year.

The January crude contract climbed 96 cents to US$58.36 per barrel on Friday after gaining a meagre 10 cents on Thursday.

"After yesterday's development I think it took some time for investors to assess OPEC's decision to maintain production limits," said Blais. "It just shows the concerns that investors have over the long-term liability of oil prices. So it's not surprising to see them step back in, in a more measured fashion."

Elsewhere in commodities, the January natural gas contract added four cents to US$3.06 per mmBTU. The February gold contract advanced US$5.60 cents to US$1,282.30 an ounce and the March copper contract was up three cents to US$3.09 a pound.

- With files from The Associated Press.