Canada's job creation stalls again in June: StatsCan

Hiring in service sector enough to outweigh losses in agriculture, resources

(Reuters) Canada's job growth slowed in June for a second straight month in a reality check after outsized employment gains earlier this year, firming the market's view that the central bank won't act soon on recent hints of a rate hike.

Waning business confidence due to the European debt crisis and a stalled United Statea economy meant Canada generated just 7,300 net new jobs last month, adding to 7,700 in May, according to Statistics Canada data released on Friday.

The June increase, though above market forecasts of a 5,000 gain, is negligible as it is within the margin of error for Statistics Canada's household survey.

Still, analysts took some comfort even from the modest gains after anticipating some payback for the unsustainable two-month jump of 140,500 jobs in March and April  the biggest in over 30 years.

"This is consistent with fairly decent progress in the Canadian labour market. After gaining a lot of jobs in March and April, we're looking at a slightly subdued pace of hiring," said David Tulk, chief Canada macro strategist at TD Securities. "I think this does speak to some residual momentum in the Canadian economy but perhaps a little bit more caution on the part of firms looking at some of the international headwinds and maybe a sense of domestic fatigue."

The unemployment rate dipped to 7.2 per cent in June from 7.3 per cent as fewer people were looking for work, Statistics Canada said.

The dismal hiring in Canada mirrored that of the U.S., where non-farm payrolls expanded by just 80,000 jobs in June, falling short of forecasts and not enough to bring down the country's 8.2 per cent unemployment rate.

The biggest job gains in the month were in the services industry, while the goods-producing sector shrank its workforce. The biggest declines were in agriculture, natural resources and construction.

Public sector hiring was strong, with some 38,900 workers added, while the private sector laid off 26,000 employees.

Nearly 30,000 full-time jobs were created, while 22,000 part-time ones were lost in the month.

Wages improved markedly; the average hourly wage of permanent employees climbed 3.3 per cent from one year ago, compared with a 2.9 per cent increase in May.

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