Canada added nearly 40,000 jobs in May, pushing the unemployment rate to a record 5.1%

Canada’s economy added 39,800 jobs last month as a surge in the number of people working full-time pushed the unemployment rate to its lowest level ever at 5.1 percent.

Statistics Canada reported Friday that more than 135,000 people were in full-time employment during the month. This more than offset a decrease of 96,000 part-time jobs.

The unemployment rate fell for the third straight month, reaching its lowest point since the comparable record began in 1976.

The increase in the number of employees in May contributes to the expansion that the Canadian economy has experienced in recent months. After losing more than three million jobs in the early days of the COVID-19 pandemic, the Canadian labor market has recovered slowly and steadily.

Growing demand for workers

In November 2021, Canada finally had the same number of employees as before the pandemic. If May’s numbers are included, it now has half a million more than it did then.

The balance between job openings and employees has shifted almost completely from an imbalance to one where employers cannot find enough people to work.

“As we begin the ritual of filling patios and heading out for overdue vacations, employers continue to look for workers to meet increasing demand,” TD Bank economist James Orlando said of the numbers. “This has job openings at record levels, making it clear that the Canadian economy is operating at more than full employment.”

Statscan says the unemployed-to-vacancy ratio has hit an all-time low of 1.2.

The demand for workers also drives up wages. The data agency says the median hourly wage has increased by $1.18 to $31.12 per hour in the past year. That is an increase of 3.9 percent. While it’s an impressive clip by historical standards, it’s still well below the country’s official inflation rate of 6.8 percent.

Workers have unprecedented influence today, and many of them are looking for higher-paying positions – and getting them.

Ellen Yifan Chen recently moved to a new job in Quebec City after working at a law firm in Montreal. (Genevieve Poulin/CBC)

Ellen Yifan Chen was a lawyer at a large Montreal office, who recently made the jump to a new job as a general counsel at a technology firm in Quebec City.

She was forced to switch by the same factors that drive many people, including flexibility, new challenges and the ability to work from home. But in the end, the dollars and cents were a big difference maker.

“I managed to get a raise in my salary and a signing bonus,” Chen said in an interview. “I would say it was a big motivating factor for me to finally take the plunge.

A lawyer at a major firm, Chen said she was told for years she would expect a dip in her compensation if she decides to move elsewhere, but she says she’s noticed a turnaround in her industry recently.

“For the past six months, I’ve been hearing offers from recruiters that match or exceed my salary I previously earned,” she said.

“Many of my friends also change jobs. I looked on LinkedIn almost every day, and someone [was] change jobs.”

Higher wages and an abundance of jobs are great news for workers, but less so for central bankers trying to curb runaway inflation.

“It’s an unwelcome sign for the Bank of Canada as higher wages drive consumer demand and inflation,” said Jay Zhao-Murray, an analyst at currency firm Monex.

“A tight labor market where workers have more bargaining power points to even higher wage growth down the line. Without any slowdown in wage growth, central bankers will continue to worry that the hot labor market will make their job of curbing inflation even more difficult. “

Leave a Comment