The Canada unemployment rate increased to seven percent in May, its highest level in more than eight years excluding the pandemic, with the economy by winning 8,800 jobs.
The unemployment rate has increased by 0.4 percentage points since February, since the uncertainty caused by US tariffs has decreased hiring.
Despite the unemployment rates climb, the Canada labor market showed resilience in May, with full -time employment by increasing by 58,000, compensated by a decrease in part -time work, said Statistics Canada on Friday.
In May, employment in the private sector increased by 61,000, while the use of the public sector fell by 21,000, after a jump in April that was attributed to the hiring of temporary workers for federal elections.
Employment increased in wholesale and retail trade, public services, information, culture and recreation and finance, real estate, insurance, rental and lease. Employment decreased in manufacturing, public administration, transport and storage, food and business and business services, construction and other support services.
“The impact of rates appears in the pattern of industry and regional unemployment pattern,” said Leslie Preston, a senior economist of Toronto-Dominion Bank, in a note for customers. “The manufacturing sector dropped 12,200, as well as transport and storage (-15,000)”.
Preston said that manufacturing has lost a total of 55,000 jobs in the last four months.
The general work comments have been stable since February, but they are lower in commercial regions sensitive to trade such as Saint John, Sault Ste. Marie, Ontario, and Windsor, Ontario, in fact said the senior economist of Canada Brandon Bernard in a note.
The Windsor unemployment rate reached 10.8 percent as the city dealt with the economic uncertainty caused by tariffs in motorized vehicles and parts, while the Oshawa rate increased to 9.1 percent.
It can also mark the beginning of the student summer labor market, with the unemployment rate among students returning from 15 to 24 years reaching 20.1 percent, which is comparable to the high rates observed in May 2009 and May 1999, excluding the pandemic.
This deterioration in the labor market will be the most important thing for the Bank of Canada in the coming months, since it monitors how American commercial uncertainty is affecting the Canadian economy. The Central Bank decided to maintain its policy rate at 2.75 percent on Wednesday, after central inflation came hotter than expected in April.
In a speech on Thursday, the Vice Governor of the Bank of Canada, Sharon Kozicki, said the policy formulators were also based on the real -time survey data of the companies impacted by the trade for their last decision, where they listened less to talk about “catastrophic results” of the business leaders.
Even so, economists said the broader trend of the growing unemployment rate could mean more features of rates by the Bank of Canada during the second half of this year. While estimates vary, economists expect the unemployment rate to reach over seven percent this year.
“We hope that the gradual increase in unemployment will continue in the second half of the year, with positive developments with respect to American tariff Canadian Bank of Compse, in a note.
The employment rate remained unchanged at 60.8 percent, coinciding with the decline observed in October 2024. The dismissal rate, which represents the proportion of people who were used in April but had been unemployed due to a dismissal in May, did not change compared to the previous year.
The total hours worked did not change in May, but increased 0.9 percent compared to the previous year. Average hourly salaries increased 3.4 percent year after year, the same growth observed in April.
• Email: jgowling@postmedia.com
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