Canada's unemployment rate rose to seven per cent in May, just 0.1 percentage point over the previous month, as many young workers entered the job market seeking summer work, according to Statistics Canada.

Nearly 26,000 jobs were created in May, but most of the gains were in part-time work. In the past year, the Canadian economy has cranked out 86,000 jobs, a relatively low number, and most of the new work is part time.

More people were working in educational services, agriculture and accommodation and food services in May, but job growth in the private sector was flat. However, on an annual basis, the private sector is responsible for most of the new work because of cuts in public sector spending. 

The economy actually shed 29,100 full-time jobs in the month, but there was a gain of 54,900 part-time jobs, most of them likely temporary seasonal work. Among sectors that lost jobs, the natural resources industry declined by about 23,000, and there were about 21,000 fewer workers in finance, insurance, real estate and leasing.

Manufacturing was also down by 12,200 and construction was largely flat.

Alberta saw the strongest gains, with 16,400 new jobs, and Newfoundland and Labrador lost 4,100 positions, but the other provinces saw little change in their employment rates.

More young people finding work

One brighter spot in the jobs picture was youth unemployment, which declined to 13.3 per cent. The number of working Canadians aged 15 to 24 increased by 49,000, bringing their employment to a level similar to that of May 2013. 

Many university and college students finish their spring term in April and seek out work for the summer.

Still, there are 1.3 million unemployed Canadians, evidence of an economy that has run out of steam after churning out strong job gains in the first few years following the 2008-09 recession.

BMO chief economist Douglas Porter says the latest report "pounds home the point that underlying Canadian job growth remains anaemic."

"Even those modest gains are almost entirely concentrated in piping hot Alberta, with the rest of the country managing just 0.1 per cent growth in the past year," he wrote in a note to investors.

"Combined with sluggish wages, soft hours worked, and the questionable quality of the jobs produced all adds up to a lacklustre labour market."