Canada Adds 8,400 Jobs in May

Canada's net job growth in May was the slowest this year as full-time employment fell, while the pace of wage growth accelerated.

Employers hired 8,400 new workers in May, Statistics Canada said today, compared with 19,200 a month earlier. The jobless rate was unchanged at 6.1 percent. Economists anticipated 10,000 new jobs and the same jobless rate, according to the median estimates in Bloomberg surveys.

The Canadian dollar has fallen for six days as investors increase bets the central bank will cut borrowing costs a fifth consecutive time on June 10. Bank of Canada Governor Mark Carney lowered interest rates by half a point in April, hinting that more action was needed because an export slump may cause the slowest growth since the country's last recession in 1992.

The report may point to ``the first major sign of weakness in the Canadian labor market, supporting our call that the Bank of Canada will reduce the overnight rate by 25 basis points on June 10,'' Karen Cordes and Derek Holt, economists at Scotia Capital Inc. in Toronto, said in a note to investors.

The currency fell 0.2 percent to C$1.0199 per U.S. dollar at 7:37 a.m. in Toronto from C$1.0179 yesterday.

Today's report follows data released May 30 that showed the world's eighth-largest economy shrank unexpectedly in the first quarter, dragged down by lower automobile exports. Gross domestic product contracted at a 0.3 percent annualized rate in the quarter, the first drop since 2003.

Canada lost 32,200 full-time jobs in May, the sharpest decline since June 2006, while adding 40,600 part-time jobs, the biggest gain since November of that year. Services-related employment fell by 20,200, the statistics agency said.

Some industries remain buoyant. Construction, benefiting from sustained demand for new homes and an energy boom, added 7,400 workers for a total of 101,200 new jobs in the past year. Manufacturing payrolls, meanwhile, grew for the first time since January, by 34,200, helping to lead an increase of 28,600 jobs in goods-producing industries.

Canada has added a net 338,500 jobs over the past 12 months and average hourly wages rose 4.8 percent in May from a year earlier, up from a 4.3 percent pace in April.

Canada Adds 8,400 Jobs in May, Bloomberg
6/6/2008 6:46:59 AM