Canada's bright jobs data clouded by U.S. gloom

Fri Jul 8, 2011 9:29am EDT
 
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By Louise Egan

OTTAWA (Reuters) - Canada's economy created a surprisingly high number of jobs in June, but dismal U.S. data and lack of wage inflation may mean the central bank keeps its foot on the accelerator for a while longer with low rates.

Net employment gains in the month totaled 28,400, Statistics Canada said on Friday, compared with the 15,000 expected by markets. The transport and warehousing industry did the most hiring and overall gains were mostly in part-time and public sector jobs.

The unemployment rate held steady at 7.4 percent as more people entered the labor market.

The job market has been stronger than expected for three straight months now, good news for an economy that is seen to have slumped in the second quarter but may regain momentum in the second half of the year.

"It was a pretty decent number. ... It's basically suggesting the economy continues to expand at a fairly decent rate," said Sheryl King, chief economist at Bank of America Merrill Lynch Canada.

But weakness south of the border, where U.S. employers hired the fewest number of workers in nine months, quickly dampened spirits in Canadian markets.

The U.S. economy actually created fewer jobs than its Canadian counterpart in June despite being many times its size.

The Canadian dollar, which had firmed to a session high against the U.S. dollar after the Statscan release, tumbled on the U.S. numbers to a session low of C$0.9665 to the U.S. dollar, or $1.0347.   Continued...

 
<p>A job seekers holds his binder filled with resumes as he waits in line before speaking with a recruiter during a health care job fair at the Phoenix Convention Center in Phoenix, Arizona November 4, 2009. REUTERS/Joshua Lott</p>