Canada’s economy saw an increase of 88,000 jobs in May, as reported by Statistics Canada on Friday. This surprising growth defied economists’ expectations and helped offset some of the job losses experienced earlier this year. The addition of jobs in May marks the first significant employment gain since November, according to Statistics Canada.
The unemployment rate also saw an improvement, dropping to 6.6 percent in May from 6.9 percent the previous month. Analysts had predicted the unemployment rate to remain at 6.9 percent and expected a net addition of 10,000 jobs in May.
The job gains in May were primarily in full-time work, with a net increase of 154,000 jobs, reversing most of the losses seen in the category in the first four months of the year. Part-time employment, however, declined by 66,200 positions.
Over the past year, the Canadian economy has faced challenges due to U.S. tariffs and trade uncertainties, leading to job losses and subdued hiring. Despite these difficulties, Benjamin Reitzes, managing director of BMO Economics, described the recent job report as “unambiguously strong.” He cautioned against excessive optimism, noting that year-over-year employment growth remains modest at 0.7 percent.
The positive job figures come after Canada reported a second consecutive quarter of GDP contraction, prompting discussions about a potential technical recession. However, economists remain divided on this, pointing to varied job trends across different sectors.
The recent job numbers, particularly the growth in industries like construction, information, and transportation, should alleviate concerns about a recession. Youth unemployment also improved in May, with the rate dropping to 13.4 percent. However, challenges persist for young Canadians in finding stable employment opportunities.
Average hourly wages for permanent employees increased by 3.2 percent in May, a slight decrease from the previous month. The latest job report sets the stage for the upcoming Bank of Canada interest rate decision, with expectations leaning towards a status quo at 2.25 percent.
Looking ahead, economists emphasize the importance of considering the underlying job market trends, which have been relatively stable and subdued. With slow job growth over the past year and a stagnant population growth, Canada’s labor market is expected to continue its gradual pace in the coming months.