Canadian job market surprises with 289,600 added in May despite COVID-19

(Getty Images)

The Canadian economy added 289,600 jobs in May, as parts of the economy reopened during the COVID-19 pandemic.

Economists were expecting 500,000 jobs would be lost during the period.

The unemployment rate went up to 13.7 per cent because the participation rate rebounded, according to the data from Statistics Canada, which is a record-high since data became available in 1976.

The majority (219,400) of the jobs created were full-time positions.

Timing played a big role in the job creation surge.

“Labour Force Survey (LFS) results for May reflect labour market conditions as of the week of May 10 to May 16,” said Statistics Canada in its report.

“By then, some provinces had begun to re-evaluate and gradually ease public health and other restrictions, including allowing some non-essential businesses to re-open.”

Quebec accounted for nearly 80 per cent of the jobs created.

Ontario, which along with Quebec has been hit particularly hard by the pandemic, was the only province to lose jobs in May.

Retail and wholesale trade, manufacturing, and construction were leading sectors for job growth.

Youth aged 15–24 saw a 29,500 increase in jobs, while the 25–54 age group saw a 168,000 bump and 92,000 for people over 55.

Women aged 25 and over saw an 80,000 rise in employment, fewer than men with a 180,000 rise.

Trevin Stratton, the Canadian Chamber of Commerce’s Chief Economist and VP of Policy, called the numbers the “Schrodinger’s cat of job” markets. He says we shouldn’t read too much into them.

“It is indeed a strange time when we react favorably to slowing job losses that by any standard measure would be catastrophic. Today’s figures (290,000 jobs gained, but 13.7% unemployment) are both terrible and positive at the same time,” he said in a release.

“We are still in an unprecedented economic downturn, but the unemployment rate is slowing. Canada avoided the worst-case economic scenario and the economic impact on the global economy has peaked, according to the Bank of Canada’s latest outlook.”

Employment declines halt in May (Statistics Canada)

Brendon Bernard, economist at Indeed, says there are signs of encouragement including a rise in jobs postings. But a number of factors will determine how a recovery plays out.

“How much the re-opening of shuttered areas of the economy boosts net-employment growth will in-part depend on whether layoffs slow,” said Bernard.

“Growth in CERB applicants has eased through early June, but haven't stopped, suggesting shockwaves from the pandemic continue to reverberate throughout the labour market. Durability of the rebound is going to require Canadians to have reason for optimism about the outlook for the economy, and the public health situation.

Prime Minister Justin Trudeau commented on the jobs numbers in his daily COVID-19 update.

“The numbers show that more Canadians returned to work last month, but that many people continue to face a really tough time,” said Trudeau.

“That tells us that moving forward, we need to stay focused on getting people back on the job.”

But the opposition Conservatives are calling for more action from the Trudeau government.

“The numbers released today also show that Canadian youth and students are getting hit hard by this pandemic. Conservatives continue to call on the Trudeau government to help match students with available jobs,” said MP Dan Albas, Shadow Minister for Employment, Workforce Development & Disability Inclusion.

The Canadian economy shed around 3 million jobs in March and April.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

Download the Yahoo Finance app, available for Apple and Android.