Labour market watchers can breathe a sigh of relief. The employment situation showed a nice rebound in May, reversing a weak start to 2026 (in which the number of people working slipped in 3 of the first 4 months of the year). Not only did full-time employment and hours worked jump, but gains were fairly broad-based across industries.
Today’s strong numbers are a good reminder of how a brewing trend in the Labour Force Survey can reverse with just one data release. The slide in full-time job growth that started in February has reversed, and the 0.3-point drop in the unemployment rate to 6.6% brings it back to where it stood in November. This isn’t exactly good news, as the challenges facing Canadian job seekers persist. But the weak momentum that began the year was probably overstated, in part because the fourth quarter of 2025 was surprisingly strong. We’re now back to baseline.
What’s next for the labour market? Probably more of the same: job postings on Indeed have been fairly steady over the past year, which also suggests stable conditions in the broader labour market. Steady labour demand is, in fact, a break from trend, after several years of decline. This potentially helped the summer job market get off to a better start in May than last year. But as the employment data rollercoaster this year shows, we shouldn’t be revising our perception of the labour market too much from just one month.
