UPDATE 2-Canada's July Ivey index tops expectations
(Adds details and comments)
By Frank Pingue
TORONTO, Aug 6 (Reuters) - The Canadian economy got a mixed reading from the Ivey Purchasing Managers Index on Wednesday, with the report showing purchasing activity rose more than expected in July, but also signaling that weak jobs data may be on the horizon.
The index, the joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business, was 65.5 in July, compared with 69.6 in June. That beat market expectations for a reading of 59.5.
A reading of 50.0 indicates that activity remained flat from the preceding month, while a higher reading indicates an increase and a lower reading reflects a slowing or decrease.
"The data yielded generally few surprises," said Charmaine Buskas, senior economics strategist at TD Securities. "The overall headline number has shown some moderation from June, but generally remains strong."
The Ivey employment index fell to 46.3 in July from 58.2 in June, while the prices index fell to 80.9 from 84.1.
The index is not seasonally adjusted and seasonal factors do not usually add or subtract that much from the employment number. But in July, Buskas said, there was a stronger seasonal influence that would suggest a seasonally adjusted reading of 46.8.
Stewart Hall, a market strategist at HSBC Canada, said the slide in the employment index suggests a soft reading for the July employment data, due on Friday, but noted that Ivey often doesn't correlate very well with the actual jobs survey.
The Canadian economy lost 5,000 jobs in June, the biggest decline since August 2006, but is expected to have added 5,000 in July.
The Ivey index is based on figures from 175 members of the Purchasing Management Association of Canada and is roughly equivalent to the U.S. Institute of Supply Management indexes.
Unlike ISM, Ivey makes no distinction between manufacturing and services, and as its index is not seasonally adjusted it can be prone to sharp moves.
The Canadian dollar rose to C$1.0449 to the U.S. dollar, or 95.70 U.S. cents, moments after the Ivey report was released, from around C$1.0474 to the U.S. dollar, or 95.47 U.S. cents. It then slowly trickled back near its pre-data level. (Reporting by Frank Pingue; editing by Rob Wilson)
