After losing more than three million jobs in March and April, Canada’s economy added 290,000 jobs in May, Statistics Canada reported Friday.
The data agency reported that 290,000 more people had paid employment in May than in April. The surge means May was the best one-month gain for jobs in Canada in 45 years, although it happened from an admittedly low bar. It also means the labour market has bounced back by about 10 per cent of the hit it took from COVID-19.
Despite the job gains, Canada’s official unemployment rate rose to 13.7 per cent, as 491,000 more people were looking for work in the job market, notably students, whose search for summer work isn’t normally recorded in the months before May.
In February, Canada’s jobless rate was 5.6 per cent. It increased to 7.8 per cent in March and 13 per cent in April. The number of unemployed Canadians has more than doubled since February.
Blows away negative expectations
The job gains came as a pleasant surprise to economists, most of whom were expecting more job losses for the month.
The average expectation for the job numbers from economists polled by Bloomberg was for a loss of about 500,000 more jobs. But not all of them thought the number would plunge again.
Economist Benoit Durocher at Desjardins was one of just two to forecast the adding of jobs — 400,000 to be precise.
That was his call before the numbers came out, and his optimism proved prescient.
His reasoning was simple: as many Canadian provinces cautiously reopened in May, some of those people who were laid off temporarily in March and April would trickle back to work and show up in May’s employment numbers.
“Employment should rebound and return to positive territory in May, but the extent of the rebound remains unclear,” Durocher said ahead of the numbers coming out. “Under these circumstances, the unemployment rate should begin trending downwards. However, the return to pre-COVID-19 levels could be fairly slow.”
