Unemployment rate falls to 31-year low
Last Updated Fri, 09 Jun 2006 07:53:52 EDT
Canada's jobless rate fell 0.3 percentage points to 6.1 per cent in May ― its lowest level since December 1974 ― as the economy churned out a stunning 96,700 new jobs last month.
The big gain in job growth handily surpassed economists' expectations. Market watches had been predicting employment to grow by just 20,000 last month.
"It goes to show that a lot of us were underestimating the strength of the Canadian economy," Scotiabank deputy chief economist Aron Gampel told CBC News.
All full-time positions
All of May's employment increase was in full-time positions, as about 151,000 new full-time jobs were created. That monthly increase was the largest on record.
Statistics Canada said the jump was due to new entrants to the labour market obtaining full-time employment. The month saw a decrease of about 54,000 part-time positions.
Through the first five months of this year, employment across the country is up by about 220,000 jobs, an increase of 1.4 per cent, Statistics Canada said Friday.
Job growth continued to surge ahead in Alberta, but Statistics Canada also reported large increases in Ontario and Quebec in May.
"Strength in the service industries in Ontario and Quebec more than offset continued declines in manufacturing," the federal government agency said.
Weakness in factory employment continued as the high Canadian dollar made it more difficult for some export-oriented manufacturers to compete. Almost 22,000 factory jobs disappeared in May, bringing the total number of lost manufacturing positions to 187,000 since the end of 2002.
The largest employment gains came in finance, insurance, real estate and leasing, health care and social assistance, and public administration.
Canadian dollar jumps
The Bank of Canada had signalled last month that it was taking a pause in its campaign of interest rate hikes. But many analysts said this jobs report is so strong, it puts real pressure on the central bank to rethink that strategy.
"With U.S. growth clearly losing momentum and equity markets stumbling, the Bank [of Canada] is likely to stay on hold at the [bank's next interest rate policy] meeting in July," said BMO Nesbitt Burns senior economist Doug Porter.
But, he added, the "drum-tight labour market" means an interest rate increase after Labour Day "is now a distinct possibility."
The prospect of further rate hikes gave a big boost to the Canadian dollar. The loonie gained 1.3 cents US to 90.42 cents US by 10 a.m. EDT.
Here are the provincial jobless rates in May (with April's rate in brackets):
- Nfld. & Labrador: 14.8 per cent (15.9)
- P.E.I.: 10.1 per cent (10.5)
- Nova Scotia: 8.0 per cent (8.1)
- New Brunswick: 8.6 per cent (9.1)
- Quebec: 7.9 per cent (8.3)
- Ontario: 5.9 per cent (6.2)
- Manitoba: 4.2 per cent (4.7)
- Saskatchewan: 4.9 per cent (4.8)
- Alberta: 3.4 per cent (3.5)
- British Columbia: 4.7 per cent (4.7)
- Canada: 6.1 per cent (6.4)
