By Ketki Saxena
Investing.com -- In May, the Canadian economy experienced its first employment decline in eight months, with job losses primarily impacting young and self-employed individuals. A total of 17,300 jobs were lost during this period while the unemployment rate rose by 0.2 percentage points to reach 5.2% - marking its first increase since August.
The latest employment figures from Statistics Canada fell short of expectations for a gain of 21,300 positions and an unemployment rate of only 5.1%. This news prompted bonds to rally and the loonie to relinquish earlier gains against the US dollar.
Prior to May's data release, Canada had enjoyed its longest streak of job growth since 2017 – creating over 423,900 positions during that time frame. Despite last month's downturn in employment numbers being deemed statistically insignificant and not offsetting previous gains made in April, ensuring the labor market remains tight and resilient despite higher borrowing costs.
Wage growth has remained strong for four consecutive months at an annual pace exceeding five percent – indicating that demand for workers is still high.
The employment rate dipped by 0.3 percentage points to reach 62.1%, as job creation failed to keep pace with strong population growth during this period.
In addition, total hours worked in May fell by 0.4% month-over-month – the most significant decline since April 2022 – and were up only 2.2% compared to a year earlier.
Sectors such as business services, building support services and waste management experienced notable decreases in their workforce numbers.
Ontario, Nova Scotia and Newfoundland & Labrador witnessed employment declines whereas Manitoba enjoyed an increase in job opportunities; other provinces remained relatively unchanged.