Employment was little changed in May (+27,000; +0.1%) and the employment rate fell 0.1 percentage points to 61.3%. The unemployment rate was 6.2% in May, up 0.1 percentage points in the month and 0.9 percentage points on a year-over-year basis, according to a new report released Friday by Statistics Canada.

Alexander Suhorucov

“Employment was up for young women aged 15 to 24 (+48,000; +3.7%) and for women aged 55 and older (+21,000; +1.1%) in May. At the same time, employment declined among core-aged women (aged 25 to 54) (-40,000; -0.6%) and young men (-23,000; -1.6%). Employment rose in May in health care and social assistance (+30,000; +1.1%), finance, insurance, real estate, rental and leasing (+29,000; +2.0%), business, building and other support services (+19,000; +2.7%), as well as accommodation and food services (+13,000; +1.1%). It declined in construction (-30,000; -1.9%), transportation and warehousing (-21,000; -1.9%) and utilities (-5,400; -3.5%),” said the federal agency.

“Employment increased in May in Ontario (+50,000; +0.6%), Manitoba (+7,800; +1.1%), and Saskatchewan (+5,400 +0.9%), while there were declines in Alberta (-20,000; -0.8%), Newfoundland and Labrador (-2,100; -0.9%) and Prince Edward Island (-1,100; -1.2%). There was little change in the remaining provinces. Total hours worked were unchanged in May and were up 1.6% compared with 12 months earlier. Average hourly wages among employees increased 5.1% (+$1.69 to $34.94) on a year-over-year basis in May, following growth of 4.7% in April (not seasonally adjusted).”

The total number of employed people was little changed in May (+27,000; +0.1%), following an increase of 90,000 (+0.4%) in April. On a year-over-year basis, employment was up by 402,000 (+2.0%) in May, said the report.

Part-time employment rose by 62,000 (+1.7%) in May, while full-time employment edged down (-36,000; -0.2%). On a year-over-year basis, part-time employment (+3.8%; +140,000) rose at a faster pace compared with full-time employment (+1.6%; +263,000), it said.

“The employment rate—the proportion of the population aged 15 and older who are employed—declined 0.1 percentage points to 61.3% in May, the seventh decrease in the past eight months. Compared with its recent high of 62.4% reached in January and February 2023, the employment rate has fallen 1.1 percentage points, as population growth outpaced employment growth,” added StatsCan.

It said the unemployment rate has trended up since April 2023, rising 1.1 percentage points over the period.

“There were 1.4 million unemployed people in May 2024, an increase of 28,000 (+2.1%) from the previous month. Of those who were unemployed in April 2024, just under one-quarter (24.0%) had transitioned to employment in May (not seasonally adjusted). This was lower than the pre-pandemic average for the same months in 2017, 2018 and 2019 (31.5%). A lower proportion of unemployed people transitioning into employment may indicate that people are facing greater difficulties finding work in the current labour market,” it said.

“Long-term unemployment—the proportion of those who had been continuously unemployed for 27 weeks or more—stood at 18.2% in May, up from a recent low of 13.2% in August 2023.”

Katherine Judge, Senior Economist at CIBC Capital Markets, said employment growth eased off in Canada in May following a surge in the prior month.
“The 27K jobs created in May was roughly in line with expectations, and that left the unemployment rate a tick higher at 6.2%, as expected. Job gains were concentrated in part-time positions (+62K), while full-time employment decreased by 36K. The involuntary part-time rate stood at 18.2%, above 15.4% a year ago, evidence of weak economic conditions. Although wages for permanent employees accelerated to 5.2% y/y from 4.8%, that series is volatile, and that still leaves the pace below recent peaks. Total hours worked were unchanged, an indication that GDP eased off following a bounce in April,” she said.
Leslie Preston, Managing Director & Senior Economist at TD Economics, said the Canadian labour market geared down in May and shows many signs of cooler job market conditions.
“Hiring continues, but Canada’s population has grown 3.4% over the past year and 2% growth in employment is not strong enough to keep the unemployment rate from rising. And it’s not just population growth, signs of softness are widespread: people are unemployed longer, job gains over the past year have been skewed towards the public sector, and the more cyclical goods sector has lost jobs over the past year,” she said.”Typically the jobs data is the week’s marquee star, but the Bank of Canada’s interest rate cut on Wednesday (see analysis) stole the show. There is plenty in May’s jobs data that supports the case for lower interest rates. However, the economy has cooled, but it has not fallen off a cliff. We expect that will lead to a gradual pace of interest rate reductions this year, with the BoC likely to cut at every other meeting. We expect a further 50 basis points in reductions in the policy rate by the end of the year easing this year.”

Mario Toneguzzi

Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list. He was also named by RETHINK to its global list of Top Retail Experts 2024.

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