Decrease in unemployment rate in Canada, slight increase in Quebec

(OTTAWA) Canada’s economy added 40,000 jobs in May, boosted by an increase in full-time jobs as the job market continued to tighten and wages rose, Statistics Canada said on Friday.

Posted at 8:38
Updated at 11:40 am

The unemployment rate fell to 5.1%, the 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 employers continue to seek workers to meet increased demand as Canadians return to the terrace and eventually head out on vacation.

“(This background is driving) the job vacancy rate to record highs, clearly showing 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 interest rates by half a percentage point to 1.5% in a bid to control inflation.

The annual inflation rate hit 6.8% in April, the fastest annual increase in 31 years.

“With more jobs and rising wage growth, the strength of domestic demand will be enough to keep Bank of Canada inflation a thorn in the side,” Orlando wrote.

Full-time employment rose by 135,000 last month, according to Statistics Canada, while part-time employment fell by 96,000.

The service sector added 81,000 jobs, the federal agency added, while accommodation and catering services added 20,000.

Jobs in professional, scientific and technical services increased by 21,000 and those in educational services by 24,000. Retail welcomed 34,000 new employees last month.

Transportation and warehousing lost 25,000 jobs, while jobs in finance, insurance, real estate and rentals and leasing fell by 19,000.

Meanwhile, the manufacturing sector lost 41,000 jobs in May, while 43,000 manufacturing jobs were lost.

Long-term unemployed, i.e. people looking for work for 27 weeks or more or being temporarily laid off, accounted for 19.7% of total unemployment in May, compared with 15.6% in February 2020, i.e. before the pandemic began.

Few changes in Quebec

In Quebec, the unemployment rate rose 0.3 percentage point to 4.2% in May, mainly due to more people looking for work. As such, the number of jobs changed little as the observed increase in full-time employment was offset by the decrease in part-time employment.

New Brunswick was the only province to see a 1% drop in jobs in May, erasing some of the gains recorded in March and April. The unemployment rate was little changed at 7.1% compared to 7.0% in April.

During the same period, the unemployment rate in Nova Scotia rose from 6.0% to 6.7% and fell from 8.1% to 7.8% in Prince Edward Island.

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