Canada shed 17,000 jobs in May, pushing up for the first time in several months the unemployment rate to 5.2 percent, the national statistical agency said Friday. The net job losses came as a surprise, after robust employment gains in recent months. Since last September about 400,000 new jobs had been created.
“After a long string of outsized gains in job growth, hiring apparently hit a rough patch in May,” said Desjardins analyst Royce Mendes.
According to Statistics Canada, most of the job losses were full-time and self-employed. There were fewer people employed in the month in business, building and other support services (-31,000), as well in professional, scientific and technical services (-13,000), the agency said.
Employment, however, increased in manufacturing (+13,000), “other services” (+11,000) and utilities (+4,200), reports BSS.
Mendes commented that the total hours worked, which fell 0.4 percent in May, “looked ugly,” and that “the only decent reading for workers came in the wage numbers, which are still running at an above-five percent annual pace.”
RBC assistant chief economist Nathan Janzen noted that more economic data is scheduled to be released before the next interest rate announcement in July.
The Bank of Canada, after becoming in March the first major central to pause its recent aggressive monetary policy to fight inflation, came off the sidelines this week to hike its key lending rate to 4.75 percent.
This followed several back-to-back hikes started in June 2022 when interest rates were at a record low.
“We continue to expect data releases to look softer as time goes on,” Janzen said in a research note, adding that “it will probably take more downside surprises to upend plans for another rate hike in July.”