UPDATE 2-Canada posts historic gain in jobs in April

* Economy adds 108,700 jobs vs 25,000 forecast

* Unemployment rate drops to 8.1 pct from 8.2 percent

* Strength seen in private sector hiring, services

* Manufacturing reports biggest job losses

* Wages of permanent workers up 2.3 percent year-on-year
(Adds market reaction, analysts, details)

OTTAWA, May 7 (BestGrowthStock) – A record number of Canadians
returned to work in April, adding pressure on the Bank of
Canada to raise interest rates in June, ahead of other major
industrialized countries.

Statistics Canada said on Friday the economy added 108,700
jobs in the month, the highest since Statscan began tracking
the data in 1976 and exceeding even the most upbeat estimate in
a Reuters poll, which yielded a median forecast of 25,000 new
jobs. The percentage increase, at 0.6 percent, was the largest
since August 2002.

The data showed private business, not government, doing the
hiring for a second straight month.

The Canadian dollar (CAD=D4: ) rallied to a high of C$1.0338
to the U.S. dollar, or 96.73 U.S. cents, compared with its
close on Thursday of C$1.0523 to the U.S. dollar, or 95.03 U.S.

“I think this is fantastic news. I think it’s very
positive. It’s just another sign that the Canadian economy is
doing better than anyone could have hoped at the start of the
year,” said Steve Butler, director of foreign exchange trading
at Scotia Capital.

“It certainly brings back into the forefront the
possibility of the Bank of Canada raising rates in June,” he

The bank last month took a first step toward tightening
monetary policy by removing a commitment to keep rates at a
rock-bottom 0.25 percent until the end of June. Most market
players now expect the central bank to raise rates to 0.50
percent on June 1.

Since the labor market began recovering last July, 285,000
workers have been added to payrolls — still short of the
417,000 jobs lost between October 2008 and July 2009.

The services sector continued to generate more employment
than the goods-producing sector in April, led by wholesale and
retail trade as well as business, building and other support
services. Hiring in the goods sector was weakened by the loss
of 20,600 factory workers.

Employment growth was up both in full-time and part-time
work and concentrated among men between ages 25 and 54,
Statscan said.

The average wage of permanent employees, watched by the
Bank of Canada for inflation pressures, rose 2.3 percent in
April from a year earlier, down from 2.5 percent in March.

Stock Market Report

(Reporting by Louise Egan; Editing by Padraic Cassidy)

UPDATE 2-Canada posts historic gain in jobs in April