Employment increased by 88,000 (+0.4%) in May and the employment rate rose 0.2 percentage points to 60.7%. The unemployment rate fell 0.3 percentage points to 6.6%. Employment increased among core-aged (25 to 54 years old) women (+31,000; +0.5%), core-aged men (+25,000; +0.3%), and youth aged 15 to 24 (+22,000; +0.8%), reported Statistics Canada on Friday.
The unemployment rate for youth declined 0.9 percentage points to 13.4%. The rate also fell among core-aged women (-0.4 percentage points to 5.5%) and core-aged men (-0.4 percentage points to 5.7%), said the federal agency.
Employment increased in several industries, most notably in construction (+27,000; +1.7%), information, culture and recreation (+19,000; +2.3%), transportation and warehousing (+19,000; +1.7%) and accommodation and food services (+17,000; +1.5%). On the other hand, employment decreased in wholesale and retail trade (-35,000; -1.2%), it noted.
Statistics Canada said employment increased by 88,000 (+0.4%) in May, the first significant employment gain since November 2025. The increase in May follows a net decline of 112,000 (-0.5%) over the first four months of 2026. On a year-over-year basis, employment was up by 147,000 (+0.7%) in May.
The number of people working full-time rose by 154,000 (+0.9%) in May. The increase in the month offsets a downward trend observed from January to April, in which the number of full-time workers fell by 156,000 (-0.9%). In May, part-time employment decreased by 66,000 (-1.7%).
The employment rate—the proportion of the population aged 15 and older who are employed—rose by 0.2 percentage points to 60.7% in May. This was the first increase since November 2025. The employment rate was unchanged on a year-over-year basis in May 2026.
Employment rose among employees in both the private sector (+56,000; +0.4%) and the public sector (+20,000; +0.4%) in May. The number of self-employed workers was little changed.
The Canadian labour market sparked back to life in May, with the 88K gain in jobs well above consensus expectations and taking the unemployment rate back down to 6.6%. Job gains were driven by full time work, with the sector breakdown showing particularly strong growth in construction, information & recreation, transportation and manufacturing. However, while much stronger than expected, the release should be viewed in the context of the weakness seen earlier in the year. The six-month average for employment is still slightly negative (-2K) and the unemployment rate is still a touch higher than the recent low recorded in January. Statistics Canada noted that students seem to be seeing a better start to the summer job market than in recent years, and the unemployment rate for 15-24 year olds fell by almost 1% to 13.4%. Prime-aged (25-54) unemployment also fell from 6% to 5.6%. Hourly wage growth for permanent employees was weaker than expected at 3.2%, suggesting that many of the new jobs picked up this month may have been lower paying,” said Andrew Grantham, Senior Economist, CIBC Capital Markets.
“For the Bank of Canada, today’s release shouldn’t change the current on-hold stance, even with the large headline beat. For now today’s strength has brought us back to where we stood earlier in the year, and further tightening in the labour market will need to be seen (alongside an acceleration in core inflation) to bring the Bank of Canada off the sidelines.”
Andrew Hencic, Senior Economist, TD, said: “No bones about it, this is a solid report. Strength in hiring across public and private sectors, and a whopping 154k jump in full-time jobs. However, this basically brings employment back to where it was in January, with an unemployment rate 0.1 percentage points higher.
“There continues to be a lot of noise in the Canadian economic data. The surprise contraction in first quarter GDP was disappointing, but with April’s flash GDP estimate signalling a 0.4% monthly gain and now May’s labour force report showing a drop in the unemployment rate, we continue to expect a second quarter bounce-back in activity. Nonetheless, the economy continues to operate below capacity, providing a disinflationary offset to the energy price shock. With this backdrop we expect the Bank of Canada to stay on the sidelines next week and keep its policy rate at 2.25%.”
More from Retail Insider:
