Canada’s job seeker’s market continued in May. The Canadian labour market made further strides last month, though momentum was a bit mixed underneath the surface. Headline employment rose at a decent pace, and the unemployment rate hit a new multi-decade low. Importantly, this progress has resulted in improving job market conditions across a diverse group of Canadians. One weaker side of the report, however, was that total hours worked were little changed, despite fewer COVID-19 related absences than in April. 

Part of the soft number in hours might reflect some of the industries where employment fell in May, particularly manufacturing, as well as finance and real estate, the latter which could reflect the effects of the recent housing market slowdown. On the flipside, solid gains were seen in retail and wholesale trade, education, and accommodation and food services, helping the students in the summer job market get off to a strong start. Meanwhile, jobs continue to grow in professional and technical services, where employment is now up a whopping 16% from its pre-pandemic level. 

Wage growth was a brighter spot in the May numbers compared to last month, though pay gains on a year-over-year level still aren’t matching inflation. Hourly earnings are rising particularly quickly in business services, as well as professional and technical services, while pay growth in accommodation and food services exceeded 6% from a year earlier for a second consecutive month. With wages showing signs of acceleration, the Bank of Canada’s tightening cycle will likely remain on the offensive.