Canada?s jobless rate stuck at 7.3 per cent as economy as 7,700 jobs in May

Dana Flavelle Business Reporter

Canada?s job creation machine churned out a modest but better than expected 7,700 jobs in May after two months of very strong gains

It wasn?t enough to budge the country?s relatively high unemployment rate of 7.3 per cent, according to data supplied by Statistics Canada Friday.

However, there were some bright spots among the data.

May?s narrow jobs gain came on the heels of two eye-popping increases in March and April when Canada added 140,000 jobs for the biggest back-to-back gains in three decades.

?After two months of massive/unbelievable job gains, some cooling is far from a shock. Perhaps the bigger story here is that Canada added to the totals despite the gathering uncertainty about the global economy,? deputy chief economist Doug Porter, at BMO Capital Markets, wrote in a research note.

Economists had expected the market to create just 5,000 jobs, while unemployment was supposed to edge higher to 7.4 per cent as more people were encouraged to look for work.

Details of the release were mixed. Most of the growth was in part-time jobs and self-employment, both considered less desirable than full-time paid work.

On the other hand, hours worked edged up slightly and average hourly wages were 3 per cent higher than a year ago.

Among sectors, Canada?s beleaguered manufacturing industry added 36,000 jobs in May, its sixth straight month of gains. Still, only a fraction of the factory jobs lost in the past five years have been recovered.

Educational services across the country rose 26,000 and agriculture grew 11,000.

Construction hiring fell by 27,000 after getting off to an earlier than usual start this year. Employment in culture and recreation also fell 27,000. Compared to a year ago, neither industry has made significant gains.

Provincially, Alberta led the way, with 9,800 new jobs, while Ontario lost a bit of ground. The unemployment rate in Albert fell slightly to 4.5 per cent, while Ontario was unchanged at 7.8 per cent

In an early preview of the summer job scene for students, this year looks a lot like last year though the market has improved since the recession.

The unemployment rate for students aged 20 to 24 was 14.9 per cent in May, similar to the rate in May 2011, but well below the 18.2 per cent rate in May 2009, when the labour market hit a low.

Among youths, aged 15 to 24, unemployment grew 1.4 percentage points over April to 14.3 per cent.

May?s overall figures show job growth in Canada will remain modest this year, an economist said.

?Future job growth is on shaky ground. Expected job cuts in the public sector along with economic uncertainty in Europe and slow-growing Asia will keep job growth at a muted pace this year,? Arlene Kish, senior principal economist at IHS Global Insight wrote in a note to clients.

Labour economist Erin Weir said May?s report was not good news for Canada?s 1.4 million unemployed.

?The economy is not creating enough jobs to get unemployed Canadians back to work. The federal government is aggravating this problem by making it easier for employers to import temporary foreign workers and more difficult for unemployed Canadians to access Employment Insurance,? said Weir, an economist with the United Steelworkers union.

By the numbers

New jobs created: 7,700

Canada?s unemployment rate: 7.3 per cent

Ontario?s unemployment rate: 7.8 per cent

Youth unemployment (age 15 ? 24): 14.3 per cent

Summer students (age 20 ? 24) unemployment: 14.9 per cent

Statistics Canada

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