Canada’s labour market showed unexpected strength in May, adding 88,000 jobs, according to the latest data from Statistics Canada.
As a result, the national unemployment rate improved to 6.6%, down from 6.9% in April.
This marks the first major employment increase since November 2025 and helps recover some of the job losses seen earlier this year.
💼 A Stronger-Than-Expected Rebound
Economists were expecting a much smaller gain of around 10,000 jobs, making May’s results a positive surprise.
Most of the new positions were full-time jobs, and hiring gains were seen across many industries.
🏗️ Which Industries Added Jobs?
Several sectors contributed to the employment growth:
✅ Construction: +27,000 jobs
✅ Information, Culture & Recreation
✅ Transportation & Warehousing
✅ Manufacturing, including industries impacted by tariffs
Meanwhile, not every sector saw growth.
📉 Wholesale & Retail Trade recorded the largest decline, losing approximately 35,000 jobs during the month.
💰 Wage Growth Slows
Average hourly wages increased by 3.0% year-over-year in May.
While wages are still growing, the pace has slowed compared to April, when wage growth was 4.5%.
🎓 Good News for Young Workers
The start of the summer job season has been more encouraging for young Canadians than it was last year.
Workers aged 15 to 24 gained roughly 99,000 full-time jobs in May, helping reduce youth unemployment for the first time since January.
📌 Youth unemployment now sits at 13.4%, which is still above the pre-pandemic average of 10.8%, but represents an improvement from recent months.
🏦 What This Means for Interest Rates
The jobs report arrives just days before the Bank of Canada’s next interest rate announcement.
Many economists believe the stronger employment numbers support the case for the Bank of Canada to keep rates unchanged at its upcoming meeting.
The Bank has maintained its benchmark interest rate at 2.25% through its last four decisions.
📈 The Bigger Picture
While Canada’s economy has faced challenges this year, including trade uncertainty and higher energy prices, the latest employment data suggests the economy remains resilient.
Growth isn’t accelerating rapidly, but the labour market continues to show signs of stability, helping ease concerns about a potential recession.
We’ll be watching closely to see how the Bank of Canada responds next week and what it means for borrowers, homeowners, and the broader economy.
Do we recommend locking in your variable rate mortgage at this time?
☐ Yes
✅ No
☐ Maybe
Markets remain uncertain, but not enough to justify rushing into a fixed rate. Unless you need payment certainty, we don’t see a strong reason to lock in right now.
That said, locking in should depend on your comfort level, timeline, and overall strategy, so reach out to us if you have questions and we’ll walk through it together.