The Canadian economy added 40,000 jobs in May, boosted by an increase in full-time jobs as the labor market continued to tighten and wages rose, Statistics Canada said Friday.
The unemployment rate fell to 5.1%, its lowest level since at least 1976, when comparable data began to be collected. The unemployment rate was 5.2% in April.
TD Bank economist James Orlando pointed out that as Canadians begin to hit the patios once more and finally hit the road to vacation, employers continue to seek workers to meet the increased demand.
“(This backdrop is driving) job vacancy rates to record highs, which clearly shows that the Canadian economy is operating beyond full employment,” Orlando wrote in a report.
Statistics Canada reported Friday that average hourly wages for all employees rose 3.9% year over year in May, compared with a 3.3% increase in April.
The jobs report follows the Bank of Canada’s decision last week to raise its key interest rate by half a percentage point to 1.5% in a bid to help control inflation.
The annual rate of inflation reached 6.8% in April, which was its fastest annual increase in 31 years.
“With more people employed and wage growth picking up, the strength in domestic demand will be enough to keep inflation a thorn in the side of the Bank of Canada,” Orlando wrote.
Full-time employment rose by 135,000 last month, while part-time employment fell by 96,000, Statistics Canada said.
The service sector saw a gain of 81,000 jobs, the federal agency added, while accommodation and food services added 20,000.
The number of jobs in professional, scientific and technical services increased by 21,000, while that in educational services rose by 24,000. The retail trade sector welcomed 34,000 new workers over the past of the month.
Transportation and warehousing lost 25,000 jobs, while jobs in finance, insurance, real estate, and rental and leasing fell by 19,000.
Meanwhile, the goods-producing sector lost 41,000 jobs in May, while 43,000 manufacturing jobs were lost.
Long-term unemployment, that is, people looking for work or on temporary layoff for 27 weeks or more, accounted for 19.7% of total unemployment in May, down from 15.6% in February 2020, i.e. before the start of the pandemic.
Few changes in Quebec
In Quebec, the unemployment rate rose 0.3 percentage points in May to 4.2%, mainly due to more people looking for work. The number of jobs as such changed little since the increase observed in full-time work was offset by the decrease recorded in part-time work.
New Brunswick was the only province to post a 1% drop in employment in May, which offset some of the gains seen in March and April. The unemployment rate was little changed, standing at 7.1% compared to 7.0% in April.
During the same period, the unemployment rate jumped from 6.0% to 6.7% in Nova Scotia and fell from 8.1% to 7.8% in Prince Edward Island.