The economy created a better-than-expected 35,400 new jobs in May as the trade sector rebounded, Statistics Canada reported said.

However, the unemployment rate was unchanged at a four-year low of 6.8% because more Canadians were looking for work.

Economists had called for 16,000 jobs to be created last month.

“This leaves employment up 90,000 so far this year, similar to the increase over the first five months of 2004,” StatsCan said.

Two-thirds of the new jobs were full-time and all of the job growth came in the private sector.

Employment in the trade sector grew by 44,800 jobs, a sign that domestic demand remains strong. Most of the strength came in motor vehicle and parts retailing, food and beverage wholesaling and retailing, and in machinery, equipment and supplies wholesaling.

The manufacturing sector continued to shed jobs, losing another 18,800 positions in May.

Job gains in May were concentrated in Ontario and British Columbia.

Analysts said the May jobs figures show the economy as a whole is still thriving.

“This report flies in the face of the sluggish jobs data from the U.S. for the same month, and reinforces the point that domestic spending is on a tear,” said BMO Nesbitt Burns senior economist Doug Porter, in a morning commentary from

“The Bank of Canada may be in no rush, but this type of report suggests that interest rates will indeed eventually need to rise,” he said.