The unemployment rate across Canada dropped to a new low of 5.1 per cent in May amid a jump in jobs for women, according to the latest Labour Force Survey results.
Statistics Canada said Friday morning that the country added 40,000 jobs last month.
Strong growth in full-time positions (135,000 new jobs) offset losses in part-time work (96,000 fewer jobs), Statistics Canada said.
Most provinces saw little movement in their employment rates, with jobs up in Alberta, Newfoundland and Labrador and Prince Edward Island but down in New Brunswick.
Women return to hard-hit sectors
The agency said that women across all age groups made up the bulk of hiring in May, with employment holding steady for men.
The participation rate, which looks at workers employed or looking for a job, hit an all-time high of 85 per cent for core-aged women in May.
Jobs were largely up in services sectors including retail and food and accommodation but were down in goods-producing areas of the economy such as manufacturing.
Rafael Gomez, director of the Centre for Industrial Relations and Human Resources at the University of Toronto, says the ramping up of these services sectors — hard-hit by the COVID-19 pandemic — is the key factor bringing more women back into the workforce.
“As those jobs have recovered with the openings in those industries, those jobs have returned,” he told Global News.
At this point in the pandemic, schools have been able to stay open on a more consistent basis, Gomez notes, giving the primary caregiver in families — on average, that tends to be women — more leeway to rejoin the workforce.
But for economists at the Labour Market Information Council, which published a report on women coming back to the workforce in March, it might be too early to say whether May’s job figures mark a fulsome recovery.
LMIC economist Brittany Feor says one of the major uncertainties is the future of work itself, and whether hybrid or remote working styles will remain a feature of the office. The level of flexibility offered to women, especially those with kids, could determine whether they remain active in the workforce.
“If women have to go back to the office or are switched to remote work, that could change how they juggle child-care responsibilities,” Feor says.
Another unknown is who the women gaining these jobs are, whether they are new entrants to the workforce or those who were laid off at the start of the pandemic and are now returning.
The Labour Force Survey data is not in-depth enough to provide those answers and could hide an economic recovery that leaves behind those originally hurt in the pandemic.
“Women are doing well today and gaining employment in higher income positions today, (but) that doesn’t really tell us what happened to the women who lost employment in April of 2020, doesn’t speak to what their experience has been,” Feor says.
Higher wages reinforce interest rate hikes
TD Bank senior economist James Orlando said as Canadians headed out to patios and hit the road for overdue vacations, employers continued to search for workers to meet heightened demand.
“This has job vacancy rates at record levels, making it clear that the Canadian economy is operating beyond full employment,” Orlando wrote in a report.
Statistics Canada said Friday average hourly wages for all employees rose 3.9 per cent on a year-over-year basis in May, compared with an increase of 3.3 per cent in April.
The jobs report follows a decision by the Bank of Canada last week to raise its key interest rate by half a percentage point to 1.5 per cent in an effort to help bring inflation back under control.
The annual pace of inflation rose to 6.8 per cent in April, the fastest year-over-year rise in 31 years.
“With more people employed and wage growth climbing, the strength in domestic demand will be sufficient to keep inflation as a thorn in the side of the Bank of Canada,” Orlando wrote.
Andrew Grantham, senior economist with CIBC Capital Markets, said in a note Friday morning that growing wages and strong job growth could raise the odds of a 75-basis-point interest rate hike from the Bank of Canada at its next decision in July.
— with files from Global News’s Kyle Benning and The Canadian Press