Canada’s unemployment rate rose to 6.2% in May as the job market showed signs of weakness, despite the economy adding 27,000 jobs last month. The labour force survey revealed that only a quarter of those who were unemployed in April found work the next month, below the pre-pandemic average. More Canadians are resorting to part-time work as they struggle to find better options, with the involuntary part-time rate increasing to 18.2% in May from 15.4% a year ago.
Young people have been particularly impacted by the job market slowdown, with employment rates for returning students aged 20-24 decreasing by 2.9% compared to a year ago. However, wage growth has remained strong, with average hourly wages increasing by 5.1% from a year ago, reaching $34.94.
In terms of industries, employment saw gains in health care and social assistance, finance, insurance, real estate, rental and leasing, business, building and other support services as well as accommodation and food services. On the other hand, employment fell in construction, transportation and warehousing and utilities.
The release of this data follows the recent decision by the Bank of Canada to lower interest rates for the first time in four years. The central bank cut its key interest rate by a quarter of a percentage point to 4.75% and hinted at further rate cuts if inflation continues to slow
