The May labour report in Canada showed little change in employment levels, with a slight increase in employment growth and a slight increase in the unemployment rate. Youth employment experienced a decline as well, and there were notable changes in work arrangements and employment rates among different demographic groups.
In May, overall employment in Canada remained virtually unchanged, with a decrease of 17,000 jobs. This indicates a slow down in employment growth compared to previous months, where monthly increases averaged 33,000 from February to April. Prior to this, there were strong employment gains of 326,000 jobs from September 2022 to January 2023.
The employment rate, which measures the percentage of people aged 15 and older who are employed, declined by 0.3 percentage points to 62.1% in May. This decline was due to strong population growth (+83,000) combined with little change in employment. The number of employees in the private and public sectors remained stable, while there was a decline of 40,000 self-employed workers (-1.5%).
Among youth aged 15 to 24, employment decreased by 77,000 jobs (-2.8%) in May. Both young women and young men experienced declines in employment, partially offsetting a net increase of 99,000 jobs recorded from November 2022 to April 2023. On a year-over-year basis, youth employment was relatively unchanged in May.
For students aged 20 to 24, the employment rate in May 2023 decreased to 63.8% for young women and remained relatively unchanged at 63.9% for young men compared to a year earlier. These rates were also lower than the pre-pandemic rates in May 2019. This is unfortunate for students looking to make money during the summer break.
Employment among core-aged men (25 to 54) increased by 43,000 jobs in May, while core-aged women saw a rise of 19,000 jobs. The employment rate for core-aged men increased by 0.3 percentage points to 88.1%, while core-aged women's rate remained unchanged at 81.7% but decreased from the record high observed in January 2023.
In terms of work arrangements, 10.0% of workers had a hybrid work arrangement in May, indicating they worked partly at home and partly in other locations. The proportion of workers who exclusively worked from home was 14.4%, down from May 2022. The industry with the highest proportion of workers exclusively working from home or with hybrid arrangements was professional, scientific, and technical services.
The employment rate for core-aged First Nations people living off reserve and Métis decreased in the 12 months leading up to May 2023, while it slightly increased for non-Indigenous people in the same age group.
As we head into summer, there was another Bank of Canada increase (0.25bps) making the overall economic outlook unpredictable. Employers are thinking twice before incurring additional head count and other discretionary spending, while employees and job seekers are prioritizing wages and job security over work flexibility. With Canada’s economy uncertain, the job market appears to be slowing down but whether that trend continues next month is anyone’s guess.
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