TORONTO, Sept 4 (Reuters) - Canadian economic activity

barely expanded in August as employment declined and prices

cooled, Ivey Purchasing Managers Index (PMI) data showed on

Friday.

The seasonally adjusted index fell to 50.1 last month from

55.8 in July, posting its lowest level since May.

The Ivey PMI measures the month-to-month variation in

economic activity as indicated by a panel of purchasing managers

from across Canada. A reading above 50 indicates an increase in

activity.

The gauge of employment dropped to an adjusted 46.0 from

51.2 in July, while the prices index was at 65.1, down from

68.5.

The unadjusted PMI fell to 50.0 from 54.6.