June job growth weaker than expected in US and Canada, economic outlook brighter for Japan and Europe

Yesterday's US employment report may be softer than expected but it failed to provide a clear signal on the inflation front. From Reuters:

U.S. employers added a fewer-than-expected 121,000 workers to their payrolls last month, but the jobless rate stayed at a five-year low and hourly earnings rose, a government report showed on Friday.

The Labor Department's employment report was a modest improvement over May's revised gain of 92,000 jobs and pointed to a cooling of U.S. economic growth.

However, the 3.9 percent year-over-year gain in average hourly earnings -- the largest in five years -- and the 4.6 percent unemployment rate heightened expectations that rising wages may weigh on the inflation-wary Federal Reserve...

Average hourly earnings rose 8 cents, or 0.5 percent, while the average work week rebounded from a May dip to match a three-and-a-half year high struck in April, the report showed.

Canada's employment situation was also weaker than expected in June, the economy losing 4,600 jobs. This, though, came after a huge 96,700 jump in jobs in May.

Elsewhere, the news was better yesterday. Japan's Cabinet Office raised its economic growth forecast to 2.1 percent for the current fiscal year to March 2007 from 1.9 percent previously, while Germany saw its industrial output rise 1.5 percent in May, the highest gain since April last year.

The May OECD composite leading indicators seem to be telling a similar story.

Moderate expansion lies ahead in the OECD area according to the latest composite leading indicators (CLIs). May data show improved performance in the CLI’s six month rate of change in the Euro area and Japan but weakening performance in Canada and the United States. The latest data for major OECD non-member economies point to slightly moderating expansion in China, improved outlook for India and Russia, while the CLI for Brazil signals a weaker outlook.