UPDATE 2-Canada job gains larger than expected in May

* Economy adds 24,700 jobs vs 12,500 forecast

* Unemployment rate stays at 8.1 pct

* Full-time jobs gain offsets part-time losses
(Adds reaction, dollar weakening)

OTTAWA, June 4 (BestGrowthStock) – Canada added 24,700 jobs in May,
almost double the expected number, as the economy posted its
fifth consecutive monthly increase in employment, Statistics
Canada data indicated on Friday.

Analysts had predicted an increase of 12,500 jobs after
April’s record gain of 108,700 positions. The unemployment rate
remained at 8.1 percent in May, matching market forecasts.

Matthew Strauss, currency strategist at RBC Capital
Markets, said the report was strong and could persuade the Bank
of Canada to raise rates again next month.

The Bank lifted its key rate by 25 basis points on Tuesday
but said it would look very carefully at economic conditions
before hiking it again.

“The (Bank) was saying they are going to pay a lot of
attention to incoming data and this would further suggest we
could likely see another 25 basis point hike in July,” said
Strauss. The bank’s next interest rate announcement will be on
July 20.

The Canadian dollar briefly (CAD=D4: ) firmed to a session
high of C$1.0352 to the U.S. dollar, or 96.60 U.S. cents, from
C$1.0379 just before the data, but then weakened to a session
low of C$1.0447.

Statscan said full-time employment increased by 67,300 in
May, offsetting a loss of 42,500 part-time jobs. The private
sector added 43,400 positions while the public sector notched a
more modest gain of 9,400.

Since the labor market began recovering last July, 310,000
workers have been added to payrolls — still short of the
417,000 jobs lost between October 2008 and July 2009.

“Another stronger than expected Canadian jobs report. I
guess we shouldn’t be too surprised — it’s getting to be the
norm,” said Sal Guatieri of BMO Capital Markets.

“It’s kind of surprising that the Canadian dollar weakened
on the report. If anything, this report pushes the Bank of
Canada another step closer to tightening policy in July.”

The average hourly wage of permanent employees, watched by
the Bank of Canada for inflation pressures, rose 2.7 percent in
May from a year earlier, up from the 2.3 percent year-on-year
increase recorded in April.

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(Reporting by David Ljunggren, Editing by Chizu Nomiyama)

UPDATE 2-Canada job gains larger than expected in May