Friday, June 6, 2008

Unemployment rate unchanged in May, StatsCan says

The unemployment rate remained at 6.1 per cent in May, but unchanged from the month before, Statistics Canada reported Friday.

Employment rose by 8,400 jobs, just below expectations of a 10,000-job rise. That was down from gains of about 19,000 jobs in each of April and March.

Analysts said the job growth numbers showed underlying weakness, since all of the growth was due to a jump in the number of part-time positions. Full-time employment actually fell by 32,200.

The number of manufacturing jobs rose by 34,200, mainly in Ontario and Quebec, but it's clear that many observers found that hard to believe.

"The details had an Alice in Wonderland feel," BMO Capital Markets economist Doug Porter said.

The job gains in May "were the kind we can’t count on in the next few quarters, being in improbable sectors and providing only part-time work," Avery Shenfeld, an economist with the Canadian Imperial Bank of Commerce, said in a commentary.

With recent layoff announcements, "it’s hard to see the manufacturing sector as anything but a sustained source of job losses until the U.S. economy is back on its feet," he said.

Nationally, there were 66,000 fewer factory jobs last month than there were a year earlier, Statistics Canada said. Total factory employment since late 2002 has fallen by 344,000.

Wage pressures continued to build last month, with average hourly wages up 4.8 per cent in the past year. Consumer prices are rising at only about 1.7 per cent.

Job numbers spark interest-cut interest

May's job creation, the weakest in any month this year, has bolstered expectations that the Bank of Canada will cut its key interest rate by another quarter of a percentage point on Tuesday.

Last month, Quebec employment rose by 18,000, the only province to post a big gain, with 14,000 jobs added in manufacturing. But the province's unemployment rate was still 7.5 per cent, and employment growth over the past year was just 1.2 per cent, well below the national two per cent rate.

About 35,000 more women over age 25 were working in May, while the number of employed men was unchanged and the number of youths working declined.

"The participation rate for adult women reached an all-time high of 62.4 per cent in May," the agency said.

The unemployment rate was 11.9 per cent for youth, 5.1 per cent for men and 4.9 per cent for women.

Unemployment in the four western provinces was below the national average.

Total Canadian employment over the past year has risen by 339,000 or two per cent, Statistics Canada said.

Shenfeld said total hours worked — down by 0.6 per cent in May — is the best signal of what is happening in the economy.

U.S. statistics also released Friday show the jobless rate rose to 5.5 per cent in May from five per cent in April.



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