Jobless rate nears 32-year low
Globe and Mail
The Canadian economy added a stunning 96,700 net jobs in May — matching a record high — driving the unemployment rate to its lowest level since December, 1974.
The rate unexpectedly tumbled to 6.1 per cent from 6.4 per cent as a jump in full-time jobs outweighed a drop in part-time positions, Statistics Canada said Friday.
The strong numbers took economists by surprise and sent the Canadian dollar higher. They expected the rate to hold steady, with only 20,000 new jobs created in the month.
"Wow," said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., in a note. "Overall, this is wall-to-wall strength."
The massive job gains also sent employment to a record high last month, at 63.2 per cent. Over the first five months of the year, employment has increased by 1.4 per cent. May's job gains matched a record reached in January 2002.
All of May's employment increase was in full-time positions, which gained a record 150,800. At the same time, part-time positions fell by 54,200.
"This jump was due to new entrants to the labour market obtaining full-time employment and coincides with fewer people working part time," Statscan said.
While growth continued to surge in Alberta, there were also big increases in the service industries in Ontario and Quebec in May.
Still, other economists sounded a note of caution about today's numbers.
"Be careful reading too much into this stunning report," said David Tulk, an economist at Toronto-Dominion Bank. "Canadian unemployment data can be notoriously volatile, with sharp increases being followed by dramatic pullbacks."
Regardless, this year's jobs gains point to an economy that continues to expand, despite the strong Canadian dollar.
At the national level, the biggest gains in May came in finance, insurance, real estate and leasing, health care and social assistance, and public administration. Employment fell, meantime, in manufacturing as well as in educational services.
As the jobless rate fell, wages continued to rise. The average hourly wage in May was up 3.8 per cent from a year ago, compared to the most recent 2.4-per-cent increase in the consumer price inflation. Average hourly wages jumped 7.3 per cent in Alberta's tight labour market.
The Canadian dollar strengthened more than a cent, to 90.40 cents (U.S.) after the report from yesterday's close of 89.12 cents.
Among industries, employment soared in finance, insurance, real estate and leasing, which gained 31,100 in May (led by gains in Quebec) and has risen 5.5 per cent.
Health care and social assistance added 23,100 jobs. Employment in the industry is up 3.4 per cent this year, with the bulk of the increase in hospitals.
Employment climbed by 22,000 in public administration, all at the municipal and provincial levels.
In May, there were also more workers in accommodation and food services, the first increase so far this year. Most of the gain occurred in Alberta.
Manufacturers continued to shed jobs last month, with Ontario and Quebec leading a decline of 21,700. The sector has shed 187,000 jobs since the end of 2002.
Manufacturers expressed dismay this morning at news of further job losses in a sector that has already been dealt its fair share of disappointments in recent months.
"I don't think we've felt the full impact of the 90-cent dollar as it relates to manufacturing jobs," said Wayne Hanley, national director of United Food and Commercial Workers Canada. "I think it's going to get worse."
"I am concerned about the long-term effect on well-paying jobs being replaced by traditionally lower-paying jobs...my concern is that one day we're going to have an economy based on the exchange of money between Canadians and we're not going to see manufacturing, building and exporting," Mr. Hanley added.
