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Canada’s economy added 88,000 jobs in May, according to Statistic Canada data out Friday, defying economists’ predictions and partially offsetting drops in employment so far this year.
Canada had lost 112,000 net jobs in the first four months of 2026, but May’s big addition helped erase almost 80 per cent of the job losses posted since the year began.
It’s the first significant employment gain since November, according to Statistics Canada.
The unemployment rate fell to 6.6 per cent in May too, from 6.9 per cent a month before.
Analysts polled by Reuters had forecast the unemployment rate to hold at the six-month-high level reached in April at 6.9 per cent and had predicted net additions of 10,000 jobs in May.
The additions in the month were entirely concentrated in full-time work, which saw a net addition of 154,000 jobs, reversing almost all of the first four months of net losses in the category, Statistics Canada said. Part-time employment fell by 66,200.
In the past year, the Canadian economy has struggled under U.S. tariffs and trade threats, which have led to job losses and sapped hiring generally.
“This is an unambiguously strong report,” said Benjamin Reitzes, BMO Economics managing director, in an investor note. “Canada continues to hold in.” However, he cautioned against too much excitement, as employment is only up 0.7 per cent year over year.
The positive figures come after some negative news last Friday, when Canada posted a second quarter in a row of GDP contraction on an annualized basis, which some economists would deem a technical recession.
But economists have been divided on whether Canada is actually in one, partly because there have been no widespread job losses and because some sectors have shown healthy growth.
Reitzes said today’s positive job numbers should ease some of those worries and “silence the recession crowd.”
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Much of the job creation came from the construction industry, which added a net 26,800 jobs, as well as information, culture and recreation which saw an additional 19,300 jobs. Transportation and warehousing posted 18,700 more jobs, while accommodation and food services grew by 17,000.
On the other side of the ledger, the wholesale and retail trade sector, which accounts for almost 14 per cent of the total employed workforce, posted a job decline of 35,000 positions in May.
Youth unemployment rate also fell to 13.4 per cent in May, down from 14.3 per cent a month earlier. Statistics Canada pointed out that the unemployment rate for youth is now 1.2 percentage points below its recent peak in September 2025.
As in the core aged workforce, the job additions for youth were concentrated in full-time roles. Young people have struggled to find work in recent years. The unemployment rate for the 15 to 24 age group has consistently stayed above pre-pandemic averages.
Average hourly wages of permanent employees, a metric closely tracked by the Bank of Canada to gauge the rise in inflation expectations, grew 3.2 per cent in May — a sharp decline from the 4.8 per cent posted in April.
The May jobs report marks the last major economic data release before the Bank of Canada’s interest rate decision comes out on Wednesday. CIBC Capital Markets senior economist Andrew Grantham said in a note that the job figures won’t change the expectation that the Bank of Canada will hold interest rates at 2.25 per cent.
On the whole, Indeed senior economist Brendon Bernard said monthly job data can be volatile, which is why it’s important to look at the underlying trend, where he sees a “stable, subdued labor market.”
He noted that the pace of job growth has been slow over the past year, and he expects it to continue at that rate in the coming months, particularly because Canada’s population is no longer growing.