Canada May Employment - Strong gains in full time and private sector work
Canada’s May employment report saw unemployment at 7.0% from 6.9% rising to the highest since September 2021. However a rise of 8.8k in employment is stronger than expected with the detail showing strong gains in full time and private sector employment. Yesterday Bank of Canada’s Kozicki said that worst case tariff-related scenarios were looking much less likely.
Full time employment rose by 57.7k while part time fell by 48.8k, a second straight month in which fill time gains outpaced part time losses. Private sector employment rebounded by 60.6k, not quite reversing two straight losses. Self-employment at -30.4k and public sector at -21.3k were weaker, the latter reversing April gains seen as due to the election.
Manufacturing with a 12.2k decline saw a fourth straight loss, and is clearly getting hit by tariffs. Construction also saw a fourth straight loss, but these losses, including May’s 7.8k, have been quite modest. Services rose by 21.8k, despite a 32.2k decline in public administration, but most of the private sector growth came in a 42.8k rise in retail and wholesale, which looks erratic, even if an encouraging hint of consumer resilience.
Unemployment was lifted by a strong 35.3k rise in the labor force. Wage growth seems to be stabilizing at a lower level, with yr/yr growth in the hourly rate for permanent employees at 3.5% for a third straight month, down from 4.0% in February.
