Employment surges in May as companies ramp up hiring, Statscan says

WATCH: Canada added nearly 60,000 jobs in May, exceeding the expectations of many economists. It was some much-needed good news on the economic front. But as Vassy Kapelos reports, the gains aren’t spread evenly across the country.

The country’s manufacturers kicked hiring into high gear last month, while retailers comfortably reabsorbed workers affected by Target’s mass layoffs, leading to a surprise surge in job creation in May.

Statistics Canada said Friday the country’s employers added 59,000 jobs last month — blowing away expectations for a meagre gain in May amid a contraction in economic activity in recent months.

The number of people looking for work also increased, the federal agency said, which left the unemployment rate unchanged at 6.8 per cent.

Still, it was the second-biggest monthly jump in jobs in the past three years, according to experts who were anticipating no more than 10,000 jobs to be added to payrolls.

The consensus call was based on the relatively lacklustre performance of the economy so far this year. Statscan said last week the economy shrank through the first three months of 2015, roiled by a sharp decline in oil prices. May’s  employment rise followed the decline of 19,700 jobs in April.

“After months in the doldrums, Canada seemed to get a huge shot in the arm in May’s jobs figures,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said.

Everywhere you want

Roughly 31,000 people found full-time work last month, with a notable rise of 22,000 jobs in the manufacturing sector, an area of the economy experts say will be crucial to driving growth going forward as highly indebted consumers take a breather.

The gain in factory jobs was the best monthly advance for the sector in well over a decade, Doug Porter, BMO’s chief economist, said. “At long last there is some strength in manufacturing,” he said.

As expected, the resource sector where oil and gas jobs are counted declined by nearly 2,500 jobs in May, while construction shed 4,700 positions. But those were among very few soft spots in an otherwise much stronger-than-expected report, providing the evidence experts have been looking for that Canada is beginning to benefit from a resurgent U.S. market place (where Canada sends three quarters of exports).

“With the U.S. economy showing clear signs of improvement, this is perhaps a sign that the Canadian non-energy economy is finally beginning to shift into a higher gear, aided by the lower Canadian dollar,” David Madani, economist at Capital Economics, said.

The private sector accounted for virtually all of May’s job growth, Statscan said.

“Not only did employment surge, but the job gains were everywhere you wanted to see them,” CIBC’s Shenfeld said.