Canada Jobless Rate Rises to 6.1%

Canada's unemployment rate rose to the highest in almost a year, as factories shed jobs for a third straight month. The pace of wage growth also slowed., Bloomberg 5/9/2008 6:17:36 AM

Employers hired 19,200 new workers, the fourth straight monthly gain, Statistics Canada said today. That was less than the 23,800 workers who entered the labor force. The country's jobless rate rose to 6.1 percent from 6 percent the month before; economists predicted the rate would stay unchanged.

Bank of Canada Governor Mark Carney said last week he'll probably need to lower interest rates again after four cuts since December, citing the slowest economic growth in 16 years. Policy makers on April 22 lowered the key rate by half a percentage point to 3 percent, the lowest since 2005.

Industries tied closely to the strong Canadian dollar and slumping U.S. demand for cars and lumber are shedding jobs, and cooling the nation's labor market. Manufacturing payrolls fell by 14,900, the third straight drop, bringing the 12-month loss to 111,500 or 5.4 percent of the workforce.

The U.S. economy, which buys three-quarters of Canada's exports, grew at a 0.6 percent annual pace in the first quarter, the same as the fourth quarter, which was the slowest since the end of 2002, the Commerce Department said April 30.

Hourly wages in Canada rose 4.3 percent in April from a year earlier, the slowest in five months and down from 4.7 percent in March.

Most of the new workers were self-employed and in lower- paying services industries. Self-employed workers increased by a net 18,300 in April, compared with a net gain of 800 workers employed by companies or government agencies, Statistics Canada said.

Services-related employment grew by 22,900 in April, while jobs in goods producing industries fell by 3,700.

Record demand for metals, energy and other commodities is helping to prop up the world's eighth-biggest economy even as a strong currency and a slowdown in the U.S., Canada's main export market, hampers manufacturers.

The construction industry, benefiting from sustained demand for new homes and an energy boom that's spawned new pipelines and refineries, added 16,200 workers for a total of 113,000 new jobs in the past year. That's the highest growth of any industry tracked by Statistics Canada.

Canada Jobless Rate Rises to 6.1%