The Conference Board of Canada’s Economist Cory Renner offers the following insights on today’s Labour Force Survey:
“Canada’s unemployment hit a record low of 5.4 per cent in May. The economy created 27,000 new full-time jobs after April’s record increase and posted solid wage growth. This paints a positive picture for Canada’s labour market. However, much of the reduction in the unemployment rate this month was due to people leaving the labour force which will further increase the pressure on firms looking to hire.”
- The economy generated a solid 27,700 new positions in May—a strong increase given the record-breaking job growth in April.
- All the new jobs created in May were full-time as part-time employment remained flat in the month.
- Job growth was strongest in Ontario (+20,900) and British Columbia (+16,800). Meanwhile, Quebec (–11,600), Newfoundland and Labrador (–2,700) and Alberta (–2,200) saw the largest declines.
- While April’s job growth was supported by an increase in the labour force, that was not the case last month.
- Canada’s labour force shrank by 49,200 in May, the largest decline since January 2018. The decline in the labour force resulted in the participation rate dropping 0.2 to 65.7.
- Solid employment gains and a decline in the labour force resulted in Canada’s unemployment falling to a record low of 5.4 per cent. While part of that drop is due to continuing employment growth, some of the decline was driven by a declining labour force. The decline in the labour force will result in more challenges for firms looking to hire.
- Tight labour markets are resulting in stronger wage growth. Average hourly wages increased by 2.8 per cent year-over-year in May.
- Overall, the report is great news for Canadian consumers, who saw their wages accelerate and more jobs. However, it is also providing further evidence of how tight our labour market is, which suggests potential challenges for firms looking to hire.