Canada hit with first monthly jobs loss of 2010

Fri Aug 6, 2010 2:36pm EDT
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By Jeffrey Hodgson

OTTAWA (Reuters) - Canada's economy unexpectedly lost jobs in July in the first such decline this year, suggesting its once robust recovery is cooling and the pace of future interest rate hikes may slow.

The 9,300 job losses brought Canada more in line with the United States, where figures out Friday showed U.S. employment fell for a second straight month in July, leaving the unemployment rate there stuck at 9.5 percent.

Statistics Canada said on Friday that a loss of 139,000 in full-time employment positions was not quite offset by a 129,700 jump in part-time jobs. The unemployment rate rose to 8.0 percent from 7.9 percent.

Analysts in a Reuters poll had forecast an increase of 15,000 jobs and a 7.9 percent unemployment rate.

It was the first time the economy dropped jobs since December and followed a strong gain of 93,200 jobs in June. Jobs growth also beat expectations in May and April.

"I view July as a bit of a payback," said Paul Ferley, assistant chief economist at Royal Bank of Canada.

"Domestic conditions remain strong enough that the Bank of Canada will continue to tighten but the pace will be a fairly gradual one."

Canada's dollar weakened on the Canadian data and later hit a low of C$1.0301, or 97.08 U.S. cents, as the U.S. report also cast doubt on the strength of the North American recovery.   Continued...