Canada gains surprise 289,600 jobs in May, jobless rate hits record
Canada unexpectedly gained 289,600 jobs in May even as the jobless rate hit a record high at 13.7%, data showed on Friday, buoyed by the loosening of stay-at-home restrictions in certain parts of the country, Trend reports with reference to Reuters.
The job gains were far better than expected. Analysts in a Reuters poll had predicted a loss of 500,000 jobs and an unemployment rate of 15.0%.
“I think this probably counts as the largest job gain in Canadian history for one month but it’s also still just a drop in the bucket in terms of recovering the lost jobs over March and April,” said Nathan Janzen, senior economist at RBC. Canada lost a record-breaking 2 million jobs in April.
The Canadian dollar climbed to a three-month high at 1.3395 per U.S. dollar or 74.65 U.S. cents. The United States, Canada's largest trading partner, also posted surprise gains for May.
“This is just another sign that activity in North America did hit rock bottom in April and started to come back in May,” said Douglas Porter, chief economist at BMO, adding: “We’ve still got a long way to go.”
The May data did not capture the 1.4 million people who temporarily lost their jobs due to COVID-19 closures, but are not currently looking for employment, StatsCan said. Had those numbers been counted, the May unemployment rate would have been 19.6% rather than 13.7%.
The record jobless rate was driven in part by students entering the summer job market who must be actively seeking work to get government COVID-19 benefits. The unemployment rate for returning students surged to 40.3 percent compared with 13.8 percent in May 2019, Statscan said.
Employment in the goods producing sector gained 164,700 jobs, led by manufacturing and construction. The services sector gained 124,900 positions, led by wholesale and retail trade, as well as accommodation and food services.