Unemployment Fell to 6.6 Percent in May as 88,000 Jobs Added: StatCan

Canada’s economy added 88,000 jobs in May, pushing the unemployment rate down to 6.6 percent and partially counteracting the decline in employment so far this year, according to federal data.

The job growth last month allowed Canada to recover nearly 80 percent of the net 112,000 jobs lost during the first four months of 2026, Statistics Canada said in a June 6 report.

The unemployment rate fell to 6.6 percent in May from 6.9 percent in April, StatCan said.

The job growth in May was concentrated in full-time work, with a net addition of 154,000 jobs, StatCan said. In contrast, part-time employment fell by 66,200.

The job gains sharply exceeded the expectations of economists, who had generally anticipated an increase of 10,000 jobs in May and a stable unemployment rate.

Youth also experienced a stronger summer job season compared to the challenging labour market of 2025, according to the report.

Individuals aged 15 to 24 secured 99,000 full-time jobs in May, marking the first decline in the jobless rate for this age group since January. The youth unemployment rate was 13.4 percent in May, above the pre-pandemic average of 10.8 percent.

Benjamin Reitzes, BMO managing director of Canadian rates, said StatCan’s latest report indicates that Canada’s economy is “hanging in there despite the headwinds from trade and now energy prices.”

“Just when you think Canada is crumbling amid a string of negative data points, things reverse,” he wrote in a June 5 note to investors.

“We’ve seen this story a few times in the past year. The economy isn’t booming, but it isn’t falling apart, either,” he added.

Tory MP Garnett Genuis, the shadow minister for employment, said the job increases are good news, but the country is still down more than 20,000 jobs since the beginning of this year.

“We’re still expecting negative growth, and we have the second highest unemployment in the G7. Simply put, we’re comparing to a worse baseline,” he said on June 5 during question period in the House of Commons. “This should not be the new normal for this great country. Why is Canada the only G20 country in recession?”

Government House Leader Steven MacKinnon welcomed the StatCan report as “incredibly good news for Canadian workers.”

“Job growth in May was broad-based across all industries,” MacKinnon said. “But get this, since December 2024 Canada has added more jobs per capita than the United States.”

Genuis accused MacKinnon of “cherry picking” numbers to make the outlook appear more favourable than it actually is.

“We have the second highest unemployment in the G7,” he said. “Having the best job numbers in Canada shouldn’t be like having the best bobsledding team in Jamaica. Canada is the only G20 economy in recession.”

Preliminary data released by StatCan late last month showed real gross domestic product (GDP) dipped by an annualized 0.1 percent in the first quarter of 2026, following a revised 1 percent contraction in the fourth quarter of 2025.

Conservative leader Pierre Poilievre has been pointing to the downturn as unique among G7 countries, while the Liberal government has characterized it as a temporary “settling-in” period.

Sectoral Jobs Gains and Losses

The construction sector experienced the most significant increase, adding 27,000 jobs, followed by the information, culture, and recreation category, as well as the transportation and warehousing sector.

The manufacturing sector reported 0.8 percent job growth in May, showing little change over the past year. However, it’s down more than 2 percent since January 2025, when economic uncertainty began to rise due to U.S. tariff policies.

The wholesale and retail trade sector suffered the greatest setback, with a reduction of 35,000 positions in the month.

Average hourly wages rose 3 percent in May, compared to an increase of 4.5 percent in April, StatCan said.

TD Bank senior economist Andrew Hencic said in a note that “there continues to be a lot of noise in the Canadian economic data,” but the “solid” report strengthens his belief that economic activity will recover in the second quarter.

“Nonetheless, the economy continues to operate below capacity, providing a disinflationary offset to the energy price shock,” Hencic wrote. “With this backdrop we expect the Bank of Canada to stay on the sidelines next week and keep its policy rate at 2.25 percent.”

The May employment report marks the last important economic update ahead of the Bank of Canada’s upcoming interest rate decision. The central bank has maintained its benchmark interest rate at 2.25 percent across four consecutive decisions.

Despite the favourable report, CIBC senior economist Andrew Grantham said Canada is simply back where it was earlier in the year.

“Further tightening in the labour market will need to be seen, alongside an acceleration in core inflation, to bring the Bank of Canada off the sidelines,” he wrote in a note to investors.

He said the United States is also reporting strong payroll growth during the month, meaning the loonie has seen little change relative to the U.S. dollar.

The Canadian Press contributed to this report.