Canada lost 17,000 jobs in May — mostly among youth

Canada lost 17,000 jobs in May, pushing the unemployment rate up to 5.2 per cent, according to a Statistics Canada report released Friday morning.

The decline is primarily driven by a 77,000 loss in jobs among youth aged 15 to 24. Meanwhile, employment increased by 63,000 among people aged 25 to 54.

Statistics Canada says the overall unemployment rate was “virtually unchanged,” with only a 0.1 per cent decrease in May. This is the first time since August 2022 that Canada has lost jobs. The agency says 326,000 jobs were gained between September 2022 and January 2023.

Average wages rose to $33.25 — a 5.1 per cent year-over-year increase. This marks the fourth month in a row when the year-over-year wage increase outpaced inflation.

Statistics Canada reports the industries that lost the most jobs in May were business, building and other support services, which lost 31,000 jobs, equivalent to a 4.4 per cent decline overall.

Economists say that this drop in unemployment puts future interest rate hikes from the Bank of Canada in question.

“While one weak labour market report doesn’t make a trend, the [Bank of Canada] will be closely watching to see if other cracks start to form,” James Orlando, senior economist for TD Economics, wrote in an email.

But one month of a weakening jobs market may not be enough.

“The Labour Force Survey is notoriously volatile,” Royce Mendes, managing director and head of macro strategy at Desjardins, wrote in an email. “It would need to be corroborated with a host of additional information to change our view that the Bank of Canada will hike again in July.”

“When things will kind of slow down a bit, we’ll be judging through a whole set of measures, trying to figure out whether things happen,” said Bank of Canada deputy governor Paul Beaudry. “But we won’t only look at one measure.”