Canada adds more jobs in August

Fri Sep 10, 2010 10:10am EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada's economy added more jobs than expected in August, but the pace of employment creation slowed from the first half of the year, suggesting the recovery was losing momentum, and market reaction to the numbers was unenthusiastic.

Statistics Canada said on Friday employment rose by 35,800 jobs last month, but the unemployment rate edged up to 8.1 percent from 8.0 percent in July as more people entered the labor force.

The Canadian dollar jumped to a three-week high against the U.S. dollar right after the data was released, but it turned lower as the market digested the details of the report.

From a high of C$1.0287 to the U.S. dollar, or 97.21 U.S. cents, touched immediately after the publication of the report, the currency slipped as low as C$1.0352 to the U.S. dollar, or 96.60 U.S. cents.

Market operators had forecast an unchanged jobless rate and a gain of 30,000 jobs in August after a surprise drop of 9,300 jobs in July -- the first decline of the year.

"With the August employment rise, all of the recession's job losses have now been recouped. Put another way, there are now more Canadians employed than ever before," said Doug Porter, deputy chief economist at BMO Capital Markets.

Still the details were soft, he added.

"Distortions in both education and manufacturing make this a cloudier jobs report than usual. However, sifting through the many cross-currents, the underlying story is on the soft side and consistent with a broader loss of economic momentum."   Continued...

<p>Shadows are seen as a man walks down Bay Street in the financial district in Toronto in this March 11, 2009 file photo. REUTERS/Mark Blinch</p>