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Canada’s economy added 88,000 jobs and the unemployment rate fell back to 6.6 per cent in May, data showed on Friday, defying widespread expectations and showing signs of some resilience despite softer economic growth.
Canada had lost 112,000 net jobs in the first four months of 2026, but May’s big addition helped erase almost 80 per cent of the job losses posted since the year began.
It’s the first significant employment gain since November, according to Statistics Canada.
Analysts polled by Reuters had forecast the unemployment rate to hold at the six-month-high level reached in April at 6.9 per cent and had predicted net additions of 10,000 jobs in May.
Canada’s economy has weathered an onslaught of U.S. tariffs and trade uncertainty for more than 12 months, hitting some crucial sectors hard and leading to job losses. It has also sucked hiring momentum and investments out from the broader economy.
The additions in May were fully concentrated in full-time work, which saw a net addition of 154,000 jobs, reversing almost all of the first four months of net losses in the category, Statistics Canada said. Part-time employment fell by 66,200.
Much of the job creation came from the construction industry, which added a net 26,800 jobs, as well as information, culture and recreation, which saw an additional 19,300 jobs. Transportation and warehousing saw gains of 18,700 jobs, while accommodation and food services grew by 17,000.
On the other side of the ledger, the wholesale and retail trade sector, which accounts for almost 14 per cent of the total employed workforce, posted a job decline of 35,000 positions in May.
Youth unemployment rate also fell to 13.4 per cent in May, down from 14.3 per cent a month earlier. Statistics Canada pointed out that the unemployment rate for youth is now 1.2 percentage points below its recent high in September 2025.
As in the core aged workforce, the job additions for youth were concentrated in full-time roles. Young people have struggled to find work in recent years. The unemployment rate for the 15 to 24 age group has consistently stayed above pre-pandemic averages.
Average hourly wages of permanent employees, a metric closely tracked by the Bank of Canada to gauge the rise in inflation expectations, grew 3.2 per cent in May — a sharp decline from the 4.8 per cent posted in April.
