The labour market rode a surprisingly strong wave of new jobs last month as the country churned out 77,000 full-time positions, Statistics Canada said on Friday. Overall, 54,400 jobs were added in May after accounting for declines in other categories including part-time work, the latest labour force survey said.
The agency found the national unemployment rate edged up to 6.6 per cent, a rise of 0.1 of a percentage point, as more people entered the job market in search of work. The fresh numbers added to several positive labour-market gains since the middle of 2016.
The survey said the latest monthly number means overall employment was 1.8 per cent higher compared to a year earlier. Analysts applauded the above-expectations headline figures Friday, as well as most of the finer details in the report.
“There’s a lot to like here,” said TD senior economist Brian DePratto, who noted it added yet another good set of data to a growing stack of positive economic numbers in recent months. “We think the Canadian economy is in a very good place right now.”
In his research note to clients, BMO’s Benjamin Reitzes called the jobs survey “a solid report almost from top to bottom.”
A closer look at the data showed healthy gains in some of the survey’s more-desirable categories — with 59,400 new jobs created in the private sector and 68,500 new paid employee positions.
By industry, the services sectors gained 31,300 jobs last month while factories added 23,300 positions, including 25,300 more in manufacturing. In services, there was a gain of 25,900 jobs in the professional, scientific and technical services category.
Youth employment gave the overall number a boost as 38,200 more young people found full-time work last month. The unemployment rate for youth slipped 0.3 percentage points to 12 per cent last month as more young people participated in the job market. The numbers easily eclipsed expectations leading up to the survey’s release.
Economists had expected a gain of 11,000 jobs and for the unemployment rate to move up to 6.6 per cent, according to Thomson Reuters.
By province, Statistics Canada said Ontario, British Columbia and Quebec saw the biggest job gains last month. Quebec’s unemployment rate dropped 0.6 percentage points to six per cent — its lowest level since Statistics Canada started collecting the data in 1976.
DePratto said the only soft numbers in the report Friday were the still-weak data for wage growth and hours worked, although he added they did improve somewhat in May.
The agency said hourly wages for all employees grew 1.3 per cent year-over-year last month, an increase over April’s all-time low of 0.7 per cent. The number of hours worked rose 0.7 per cent, the report said.
DePratto said the jobs numbers combined with other robust economic figures of late, including growth, trade, and retail, will likely start to tilt the Bank of Canada towards hiking its benchmark interest rate.
— Andy Blatchford, The Canadian Press
The Bank of Canada’s second in command says the country is riding an encouraging burst of economic momentum that’s fuelling growth in 70 per cent of its industries. But in a speech, senior deputy governor Carolyn Wilkins is also hinting the central bank is not quite ready to hike its benchmark interest rate due to several lingering uncertainties.
Wilkins said the broad-based surge in growth is something Canada hasn’t seen since before the oil-price shock nearly three years ago. Wilkins is crediting strength in consumer spending, the services sector and the housing markets for helping carry Canada over the last few years — and now points to expanding business investment, particularly in the energy sector, as another promising sign.
However, she also suggests the central bank will remain cautious when it comes to the interest rate as she underscores ongoing uncertainty surrounding U.S. economic policy, Canada’s below-target inflation as well as employment weaknesses in wage growth and the number of hours worked. The bank’s next scheduled rate decision is July 12.