OTTAWA (Reuters) - Canada’s economy likely created a paltry 5,000 new jobs in June for a second straight month of slower hiring as employers worried about fallout from the European debt crisis and the stalled U.S. economy.
The median forecast in a Reuters survey of economists is for a job gain of 5,000 in the month, with seven of the 25 forecasters surveyed predicting job losses.
The unemployment rate is seen unchanged from May at 7.3 percent.
“We are forecasting a gain in jobs, but again the underlying details should not be that impressive, with increases in part-time work, which should offset some expected weakness in the broad public sector,” Arlene Kish, economist at IHS Global Insight, said in a research note.
Statistics Canada’s employment data surprised the market in March and April, detailing the biggest two-month spree of job creation in more than 30 years. The bonanza came to a halt in May, though, with an employment gain of 7,700.
Analysts see that type of slow but steady job growth as more in line with economic fundamentals.
A still-respectable 25,500 jobs will have been created on average in each month from January to June, if the median forecast proves accurate. That would be the equivalent of about 230,000 new jobs every month in the United States, where the population is nine times bigger.
Canada has long recovered the jobs lost during the recession as the economy bounced back from a downturn that was milder than the one in the United States.
But the job market remains tough and analysts are diving into details on part-time versus full-time positions and job quality indicators to assess just how healthy the economy really is.
Some setbacks are expected in the manufacturing and construction sectors, which have seen outsized gains in recent months, but other areas may pick up the slack.
“The goods sector, which has seen a string of seven consecutive monthly increases, led by a record six-month surge in manufacturing employment, is likely to retreat, as the gains seem a little overdone given the global headwinds and cooling housing market,” said Benjamin Reitzes of BMO Capital Markets.
“Service industries are expected to offset any losses, with the trade sector potentially building on May’s rebound,” he said.
Reporting By Louise Egan; Editing by Peter Galloway