Canada Adds 19,200 Jobs; Jobless Rate Rises to 6.1% (Update2)
By Theophilos Argitis
May 9 (Bloomberg) -- Canada's unemployment rate rose to the highest in almost a year, as factories shed jobs for
a third straight month. The pace of wage growth also slowed.
Employers hired 19,200 new workers, the fourth straight monthly gain, Statistics Canada said today. That was less
than the 23,800 workers who entered the labor force. The country's jobless rate rose to 6.1 percent from 6 percent
the month before; economists predicted the rate would stay unchanged.
Bank of Canada Governor Mark Carney said last week he'll probably need to lower interest rates again after four
cuts since December, citing the slowest economic growth in 16 years. Policy makers on April 22 lowered the key
rate by half a percentage point to 3 percent, the lowest since 2005.
``From a policy standpoint, it doesn't change the view the Bank of Canada will lower interest rates by another 25
basis points'' at its next announcement on June 10, Stewart Hall, market strategist at HSBC Securities in Toronto,
said in a telephone interview. ``At best, the report shows you are not keeping up with the natural growth in the
labor force.''
Industries tied closely to the strong Canadian dollar and slumping U.S. demand for cars and lumber are shedding
jobs, and cooling the nation's labor market. Manufacturing payrolls fell by 14,900, the third straight drop, bringing
the 12-month loss to 111,500 or 5.4 percent of the workforce.
U.S. Economy
The U.S. economy, which buys three-quarters of Canada's exports, grew at a 0.6 percent annual pace in the first
quarter, the same as the fourth quarter, which was the slowest since the end of 2002, the Commerce Department
said April 30.
Hourly wages in Canada rose 4.3 percent in April from a year earlier, the slowest in five months and down from 4.7
percent in March.
Most of the new workers were self-employed and in lower- paying services industries. Self-employed workers
increased by a net 18,300 in April, compared with a net gain of 800 workers employed by companies or
government agencies, Statistics Canada said.
Services-related employment grew by 22,900 in April, while jobs in goods producing industries fell by 3,700.
``Overall, it was not a great report,'' said Karen Cordes, an economist at Scotia Capital Inc. in Toronto. ``The
private- sector is shedding jobs, and we saw continued reductions in the manufacturing sector.''
Commodities
Record demand for metals, energy and other commodities is helping to prop up the world's eighth-biggest
economy even as a strong currency and a slowdown in the U.S., Canada's main export market, hampers
manufacturers.
The construction industry, benefiting from sustained demand for new homes and an energy boom that's spawned
new pipelines and refineries, added 16,200 workers for a total of 113,000 new jobs in the past year. That's the
highest growth of any industry tracked by Statistics Canada.
Economists surveyed by Bloomberg predicted the economy would create 10,000 new jobs, the median of 24
estimates.
Canada's dollar advanced 1.1 percent to C$1.0058 per U.S. dollar at 4:05 p.m. in Toronto from C$1.0172
yesterday.