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Canada Employment Rebounds by 35,800 in August While Jobless Rises to 8.1%

Canadian employers added more jobs than forecast in August, led by educators, and the unemployment rate rose as more people entered the workforce.

Payrolls rose by 35,800 jobs, the seventh gain in the past eight months, following a drop of 9,300 in July, Statistics Canada said today in Ottawa. Gains averaged 13,250 for the past two months, less than the 51,400 average in the first half of the year.

“The Canadian economy is still generating jobs, but you’re seeing the pace slow from what we were looking at earlier in the year,” said Royal Bank of Canada Deputy Chief Economist Paul Ferley, adding that the two-month average offers a better view of the labor market.

Slower job growth may give the Bank of Canada more reason to keep interest rates unchanged at its next policy announcement on Oct. 19. Earlier this week, the bank raised its benchmark interest rate to 1 percent and said it now expects a more gradual recovery in economic growth.

The unemployment rate rose to 8.1 percent from 8 percent as 53,500 more people joined the labor force. Economists forecast job growth of 30,000 and an unemployment rate of 8 percent, according to the median estimates in Bloomberg surveys.

Full-Time Jobs

Full-time employment surged by 79,900 positions in August, the largest gain in 11 months, which was partly offset by a drop of 44,100 in part-time jobs.

The overall report is “consistent with a broader loss of momentum in the Canadian economy,” BMO Capital Markets Deputy Chief Economist Douglas Porter said in a note to clients. “The muddied nature of this report doesn’t change the dial on the outlook for the Bank of Canada.”

The Canadian dollar rose to C$1.0326 per U.S. dollar at 9:14 a.m. in Toronto from C$1.0339 yesterday. It touched C$1.0288 shortly after the report, the strongest since Aug. 19.

Employment in educational services rose by 68,400 positions after falling by 65,300 in July. Manufacturing companies cut 25,600 jobs in August, Statistics Canada said.

AbitibiBowater Inc., the world’s biggest newsprint maker by capacity, said on Aug. 24 it was permanently closing two Quebec plants that had employed 570 workers, the Canadian Broadcasting Corp. reported. Tembec Inc., a forest products company, said on Sept. 2 it was closing its Pine Falls, Manitoba newsprint mill and firing 230 workers.

Information Companies

Information companies cut 18,100 jobs in August, Statistics Canada said. Postmedia Network Inc., which owns newspapers across the country including Toronto-based National Post, said it has cut positions to tighten operations, the Canadian Press reported Sept. 3.

Governments hired 57,500 workers while companies eliminated 39,900 jobs. Quebec led the gain, with 19,400 new positions, while Alberta recorded a decline of 4,700.

Average hourly wages rose 2.3 percent in August from a year earlier, Statistics Canada said in the report. That’s up from an annual increase of 2.2 percent in July.

Payroll employment advanced by 17,600 positions in August, and self-employment gained 18,200, the agency said. Canada’s economy has created 396,300 jobs since August 2009.

To contact the reporter on this story: Alexandre Deslongchamps in Ottawa at adeslongcham@bloomberg.net.

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