Economy unexpectedly lost 7,500 jobs in May as unemployment rate held at 5.8%
Average of forecasts had pointed to a gain of more than 22,000 jobs last month
The Canadian employment picture was weaker than expected in May, as the country unexpectedly lost about 7,500 jobs, according to figures released Friday by Statistics Canada.
The average expectation of 14 forecasts was for the country to add just over 22,000 jobs last month, Bloomberg said.
Despite the small drop in the number of people working, the national unemployment rate held steady at 5.8 per cent last month.
Full-time employment dropped by 31,000 in May, but that was offset by a rise in part-time work of about 23,600 jobs for the month.
Statistics Canada said employment for men and women in the core working ages of 25 to 54 both fell by about 19,000 in May. The unemployment rate for men in this age group held steady at five per cent, while it increased by 0.2 percentage points to 4.9 per cent for women
Provincially, employment increased in Prince Edward Island, while it decreased in British Columbia and Nova Scotia. Among the other provinces, little change in the job situation was seen.
P.E.I. added 800 jobs in May as the provincial unemployment rate fell by 1.9 percentage points from April, to 9.3 per cent.
In B.C., employment dropped by 12,000 in the month. Statistics Canada said that for the first time since May 2015, employment there showed virtually no growth on a year-over-year basis. The unemployment rate in the province, however, remained at 4.8 per cent in May.
The jobless rate in Alberta eased to 6.2 per cent from the 6.7 per cent seen in April.
Economists suggested Friday's subdued job report won't be enough to keep the Bank of Canada from boosting a key interest rate next month. They pointed to wage growth figures included in Friday's report as a potential factor in that pending rate decision.
Scotiabank economist Derek Holt said wage growth in May accelerated to 3.9 per cent year-over-year for permanent employees — the fastest wage growth since July 2012.
"Finally, Canadian workers are getting wage gains that are outstripping the rising cost of living," Holt wrote in a commentary. "This is hawkish at the margin as it reinforces wage and price pressures in the Canadian economy."
TD senior economist Brian DePratto said the Bank of Canada "may not be encouraged by all the details of today's report, but wage growth nearing [four per cent year-over-year] will be certain to garner discussion."
"All told, there is little in today's report to alter our view that the [Bank of Canada] remains likely to hike its policy rate in July, switching into 'hold and assess' mode thereafter."
Summer student work
Statistics Canada also offered its first look of the year at the summer job situation for students.
The federal agency said employment among 20- to 24-year-old students — who had been in school full-time student as of March — was virtually unchanged in May. The unemployment rate for the group was 13.6 per cent, which was relatively unchanged from May 2017.
For students in the 17-19 year old range, there were 33,000 fewer of them working in May compared with the same month in 2017, with the drop entirely due to a decrease in part-time work. The unemployment rate for the younger group of students remained at 14.6 per cent.