Canada lost 17,000 jobs in May, pushing the unemployment rate up to 5.2 per cent, according to a Statistics Canada report released Friday morning.
The decline is primarily driven by a 77,000 loss in jobs among youth aged 15 to 24. Meanwhile, employment increased by 63,000 among people aged 25 to 54.
Statistics Canada says the overall unemployment rate was “virtually unchanged,” with only a 0.1 per cent decrease in May. This is the first time since August 2022 that Canada has lost jobs. 326,000 jobs were gained between September 2022 to January 2023.
Average wages rose to $33.25 — a 5.1 per cent year-over-year increase. This marks the fourth month in a row when the year-over-year wage increase outpaced inflation.
Statistics Canada reports that the the industries that lost the most jobs in May were business, building and other support services, which lost 31,000 jobs, equivalent to a 4.4 per cent decline overall.
Youth can’t find work
Shaziah Jinnah Morsette, president of the University of Calgary Students’ Union, has been seeing students at her university struggle to find employment first-hand. She says one in five students they recently surveyed have been able to find full-time work this summer.
“Often, this isn’t just summer full-time work that they want; it’s summer full-time work that they need,” said Morsette. “That cost-of-living crunch, that affordability crunch is being really felt by post-secondary students, and has been for years.”
In Alberta, the youth unemployment rate was 11.3 per cent this May — double the overall provincial unemployment rate of 5.7 per cent, according to Statistics Canada.
Statistics Canada reports a particularly acute change in youth employment for returning students, especially young women between the ages of 20 and 24. In this group, although 69.5 per cent were employed in May 2022, only 63.8 per cent are employed as of this May. That is four per cent lower than the pre-pandemic rate recorded in May 2019.
“The landscape has changed,” Morsette said. “This isn’t anything like 25 years ago where you could easily find a job over the summer [and] work to pay your year of tuition ahead.”
She said that the need to work increased hours takes students’ time away from extracurriculars, volunteering and their studies — all experiences that assist students when looking for jobs after graduation.
“Students aren’t able to access those things because they’re having to choose to take on those extra hours to continue to cover their bills,” said Morsette. “That does take a toll — not only on their grades, but also on their mental health and their well-being.
“That leaves the Alberta economy behind — it leaves our Canadian economy behind.”
Interest hikes could slow
Economists say that this drop in unemployment puts future interest rate hikes from the bank of Canada in question.
“While one weak labour market report doesn’t make a trend, the [Bank of Canada] will be closely watching to see if other cracks start to form,” James Orlando, senior economist for TD Bank, wrote in an email.
But one month of a weakening jobs market may not be enough.
“The Labour Force Survey is notoriously volatile,” Royce Mendes, managing director and head of macro strategy at Desjardins, wrote in an email. “It would need to be corroborated with a host of additional information to change our view that the Bank of Canada will hike again in July.”
“When things will kind of slow down a bit, we’ll be judging through a whole set of measures, trying to figure out whether things happen,” said Bank of Canada Deputy Governor Paul Beaudry. “But we won’t only look at one measure.”