How Canada just reversed a year of job losses in one month

Canada’s labor market staged a massive comeback in May, adding 87,800 jobs and driving the unemployment rate down to 6.6%, according to the latest data from Statistics Canada.

The hiring surge completely shattered expectations. Analysts polled by Reuters had predicted a modest gain of just 10,000 jobs and expected the unemployment rate to hold steady at a six-month high of 6.9%. Instead, May marked the first month of job growth this year, effectively wiping out nearly 80% of all employment losses recorded since the start of January, News.Az reports, citing Reuters.

The gains were entirely driven by high-quality positions, with full-time employment skyrocketing by 154,000, while part-time roles fell by 66,200. Hiring was strongest in construction (+26,800), culture and recreation (+19,300), and transportation and warehousing (+18,700). However, the retail and wholesale trade sector took a hit, shedding 35,000 positions. Youth unemployment also saw its first improvement since January, dropping nearly a full percentage point to 13.4%.

This sudden labor market resilience comes at a critical time for Canada, which entered a technical recession at the end of the first quarter following a year of U.S. tariff pressures and trade uncertainty. While the data complicates the debate over the true depth of the economic slowdown, it offers a silver lining for policymakers. Additionally, the Bank of Canada received some welcome news on the inflation front: average hourly wage growth for permanent employees cooled significantly, dropping to 3.2% in May from 4.8% in April. Economists expect hiring momentum to get another boost in June and July as Canada begins hosting matches for the upcoming football World Cup.

News.Az 

By Aysel Mammadzada