Canada’s May job gains exceeds forecasts; wage growth accelerates
2024.06.07 08:57
OTTAWA (Reuters) – The Canadian economy added more jobs than expected in May, the jobless rate ticked up to 6.2%, and the growth-rate of wages accelerated to a four-month high, data showed on Friday.
The economy added a net 26,700 jobs, more than the 22,500 job gain forecast by Analysts in a Reuters poll.
The unemployment rate ticked up to a 28-month high of 6.2% from 6.1% in April, matching forecasts. The jobless rate, on an uptrend up over the past year, has risen 1.1 percentage points since April 2023, Statistics Canada data showed.
The employment gains in May were driven by part-time work, which more-than offset full-time positions lost in the month, Statscan said. Statscan noted that the proportion of part-time workers who could not find a full-time job or who worked part-time due to poor business conditions was 18.2% in May, the highest since December 2021.
The average hourly wage growth for permanent employees accelerated to an annual rate of 5.2% from 4.8% in April, Statistics Canada said. The wage growth rate – closely tracked by the Bank of Canada (BoC) because of its effect on inflation – was the highest since January’s 5.3% rate.
The acceleration in wages may be a point of concern for the central bank, which trimmed its key policy rate on Wednesday and indicated further easing would be gradual and dependent on data. The bank will have another month’s job data before its next rate announcement is on July 24, when money markets see a 50% chance of another rate cut.
In May, employment in the goods sector decreased by a net 20,700 jobs, mainly in construction, while the service sectors gained a net 47,400 positions, led by health care and social assistance as well as finance-related jobs.
