Despite a growing population and an expanding labour force, job creation has not kept pace, leaving 190,900 more Canadians unemployed.
Statistics Canada’s Labour Force Survey for May showed that Canada’s labour market continued to decline as national unemployment rose to 7.0 per cent — the highest level since 2016.
Canada added 845,100 people to the population and expanded its labour force by 470,800. Despite this, only 279,800 jobs were created, while 190,900 more Canadians reported being unemployed. Although unemployment rose, overall employment was virtually unchanged. The month saw a modest net gain of just 8,800 jobs (0.0 per cent growth), as gains in full-time positions (+58,000) were largely offset by a sharp drop in part-time employment (-49,000).
The employment rate remained at 60.8 per cent for a second consecutive month.
The labour market saw a decline in public sector employment (-21,000) and self-employment (-30,000), while private sector jobs rose by 61,000 marking the first increase since the start of 2025.
Total hours worked were flat during the month but up 0.9 per cent compared to a year ago.
The labour market showed diverging trends across age and gender groups.
Core-aged women (25 to 54) added 42,000 jobs in May (+0.6 per cent), lifting their employment rate to 80.1 per cent.
By contrast, core-aged men lost 31,000 jobs (-0.4 per cent), driving their employment rate down to 86.0 per cent, the lowest level since 2018.
Employment levels for youth and older Canadians remained largely unchanged.
The rising unemployment rate is partly driven by a weakening summer job market for young people.
Among returning full-time students aged 15 to 24, the unemployment rate surged to 20.1 per cent in May, up 3.2 per cent this year.
The ongoing youth unemployment crisis mirrors situations seen between the 1990s and the 2009 financial crisis…
Youth were hit hard in the summer-focused industries such as in accommodation and food services which dropped by more than 22 per cent (-66,000), while jobs in retail and recreation remained relatively stable.
Regionally, employment increased in British Columbia (+13,000), Nova Scotia (+11,000) and New Brunswick (+7,600), but declined in Quebec (-17,000), Manitoba (-5,800), and Prince Edward Island (-2,700).
Other provinces also saw insignificant changes.
Job gains were recorded in wholesale and retail trade (+43,000), information, culture and recreation (+19,000), and finance and real estate (+12,000).
Meanwhile, public administration (-32,000), accommodation and food services (-16,000), and transportation and warehousing (-16,000) saw notable declines.
Average hourly wages rose 3.4 per cent year-over-year to $36.14, maintaining the pace from April.
May marked the third straight month of rising unemployment.
Since February, the rate has increased by 0.4 percentage points, with 1.6 million Canadians now unemployed at 13.8 per cent from May 2024 earlier.
The survey also found that unemployed Canadians are spending more time looking for work.
The average duration of unemployment in May was 21.8 weeks, up from 18.4 weeks the previous year.
Nearly half of those out of work (46.5 per cent) had not been employed in the past 12 months or had never worked.
Unemployment is projected to rise in the future, with TD forecasting that there will be 100,000 job losses by the third quarter of 2025 during a potential recession.
Tiff Macklem, the Governor of the Bank of Canada said during his opening press remarks on Wednesday that “businesses are generally telling us that they plan to scale back hiring.”