Canada’s economy saw an increase of 88,000 jobs in May, as per the latest data from Statistics Canada released on Friday. This unexpected rise has helped to offset some of the job losses experienced earlier this year. The addition of jobs in May, the first significant increase since November, has managed to recover nearly 80% of the job losses recorded in the first four months of 2026.
In addition to the job gains, the unemployment rate in Canada dropped to 6.6% in May, down from 6.9% the previous month. Economists had predicted the unemployment rate to remain at 6.9% and anticipated a net increase of 10,000 jobs for May. However, the actual job additions were much higher, with a focus on full-time positions which saw a net increase of 154,000 jobs, offsetting the decline in part-time employment by 66,200 positions.
Over the past year, the Canadian economy has faced challenges due to U.S. tariffs and trade uncertainties, resulting in job losses and subdued hiring trends. Despite this, the recent job report has been described as a positive sign by Benjamin Reitzes, Managing Director of BMO Economics. While Reitzes acknowledged the strength of the report, he also highlighted the modest year-over-year employment growth of 0.7%.
The positive job numbers come after Canada reported two consecutive quarters of GDP contraction, leading to discussions about a potential technical recession. However, there is a divide among economists on whether the country is currently in a recession, citing the absence of widespread job losses and growth in certain sectors.
The increase in jobs in May was particularly notable in industries such as construction, information, culture, recreation, transportation, and warehousing, while wholesale and retail trade saw a decline in employment. The youth unemployment rate also decreased to 13.4% in May, indicating an improvement from the previous month.
Looking ahead, the job market is expected to remain stable and subdued, according to economists. Despite the positive job numbers, it is unlikely to impact the Bank of Canada’s decision on interest rates, with expectations that rates will remain unchanged at 2.25%. Monthly job data can be volatile, and the underlying trend suggests a slow pace of job growth in the foreseeable future, especially with Canada’s population growth leveling off.