Canada’s Labour Market Roars Back with 87,800 New Jobs, Defying Expectations
Canada’s economy added 87,800 jobs and the unemployment rate fell to 6.6% in May, data showed on Friday, defying widespread expectations of only modest employment growth and showing some resilience despite signs of softer economic growth.
The May data marked the first job growth of 2026 and helped wipe out almost 80 per cent of all job losses posted since the start of the year.
The last time the economy added a significant number of jobs was October, 2025, Statistics Canada said. Analysts polled by Reuters had forecast the unemployment rate last month would hold steady at the six-month high of 6.9 per cent reached in April and had predicted a net gain of 10,000 jobs.
For more than a year, Canada’s economy has weathered an onslaught of U.S. tariffs and trade uncertainty, which has hit some crucial sectors very hard and led to job losses. It has also sucked hiring momentum and investments out of the broader economy.
The Canadian economy entered a technical recession – two consecutive quarters of economic contraction – at the end of the first quarter on an annualized basis. But economists have been divided on whether it was actually in recession, as there have been no widespread job losses and some sectors have shown healthy growth.
Statscan said the construction sector added a net 26,800 jobs, the information, culture and recreation sector saw a gain of 19,300 jobs, transportation and warehousing employment grew by 18,700 jobs and accommodation and food services gained 17,000 jobs.
The wholesale and retail trade sector, which accounts for almost 14 per cent of the total employed workforce, posted a decline of 35,000 positions.
Economists have said that the upcoming FIFA World Cup soccer tournament, which is being partly hosted by Canada, will also likely boost jobs in the months of June and July across some sectors.
The job growth last month was concentrated entirely in full-time jobs, which saw a net addition of 154,000 in May, reversing almost all of the first four months of net job losses in that category, StatsCan said. Part-time employment fell by 66,200 positions.
Average hourly wages of permanent employees, a metric closely tracked by the Bank of Canada to gauge inflation expectations, grew 3.2 per cent in May, a sharp decline from 4.8 per cent in April.
The unemployment rate for youth declined 0.9 percentage points to 13.4 per cent, the first decline since January, Statscan said.
This article was first reported by The Globe and Mail
