(Ottawa) Canada’s economy added 40,000 jobs in May, buoyed by an increase in full-time jobs as the labor market continues to tighten and wages rise, Statistics Canada reported Friday.
Posted at 8:38
Updated at 11:40 AM
The unemployment rate has fallen to 5.1%, the lowest level since at least 1976, when comparable data began to be collected. The unemployment rate was 5.2% in April.
James Orlando, an economist at TD Bank, noted that as Canadians begin to hit the yards again and finally hit the furlough path, employers continue to look for workers to meet rising demand.
“(This backdrop is driving) vacancy rates to record levels, which clearly shows that the Canadian economy is operating well beyond full employment,” Orlando wrote in a report.
Statistics Canada reported Friday that average hourly wages for all employees rose 3.9% year-on-year in May, compared to a 3.3% increase in April.
The jobs report comes on the heels of the Bank of Canada’s decision last week to raise its key interest rate by half a percentage point to 1.5% in an effort to help control inflation.
The annual inflation rate was 6.8% in April, its fastest annual rise in 31 years.
“With more workers and higher wage growth, the strength of domestic demand will be enough to keep inflation a thorn in the Bank of Canada’s side,” Orlando wrote.
Statistics Canada said full-time employment rose by 135 thousand last month, while part-time employment decreased by 96 thousand.
The service sector saw a gain of 81,000 jobs, while accommodation and food services added 20,000 jobs, the federal agency added.
The number of jobs in professional, scientific and technical services increased by 21 thousand, while the number of jobs in educational services increased by 24 thousand, and the retail trade sector received 34 thousand new workers during the past month.
Transportation and warehousing lost 25,000 jobs, while jobs in finance, insurance, real estate, and rental and leasing fell by 19,000.
Meanwhile, the goods production sector lost 41 thousand jobs in May, while 43 thousand industrial jobs were lost.
Long-term unemployment, that is, people looking for work or being laid off temporarily for 27 weeks or more, made up 19.7% of total unemployment in May, down from 15.6% in February 2020, which is before the pandemic began.
Few changes in Quebec
In Quebec, the unemployment rate rose 0.3 percentage points in May to 4.2%, mainly due to an increase in people looking for work. The number of jobs has not changed so little since the marked increase in full-time employment has been offset by the recorded decline in part-time work.
New Brunswick was the only province to report a 1% drop in employment in May, offsetting some of the gains it saw in March and April. The unemployment rate was little changed, at 7.1% compared to 7.0% in April.
During the same period, the unemployment rate jumped from 6.0% to 6.7% in Nova Scotia and fell from 8.1% to 7.8% in Prince Edward Island.
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