Canada's jobs market is holding up surprisingly well in the face of mounting global economic uncertainty.
As grim reports pile up from the euro zone and the U.S. labour market shows signs of faltering, Canadian employment remains sturdy, thanks to strength in Alberta and among the country's factories.
The economy eked out a small gain in hiring last month, dispelling worries of a drop, following two months of robust gains. All told, the labour market has seen an average of 28,000 new jobs a month over the past half year, a respectable showing given the external turmoil.
“The good news is that amidst slowing global growth and an ongoing European financial crisis, the Canadian economy continues to hold its own,” said Diana Petramala, economist at Toronto-Dominion Bank, in a note.
Improving employment, combined with a pickup in wage gains, will help support consumer spending and overall economic growth in the second quarter, she added.
Wages popped higher, after a string of tepid gains. Average hourly earnings rose 3 per cent from a year ago, a pickup from 2.3 per cent in April, above the rate of inflation and the fastest increase since late 2009.
In another solid sign, total hours worked rose 0.2 per cent last month, yielding an annualized gain of about 2 per cent.
All told, employers added 7,700 jobs in May, as gains in factories and education outweighed a loss in construction. The jobless rate stayed at 7.3 per cent, Statistics Canada said Friday, the same as a month earlier but an improvement from 7.6 per cent at the start of the year.
The mood in the market is cautious optimism, said Stacy Parker, executive vice-president of marketing at staffing firm Randstad Canada.
“Small to mid-sized organizations are seeing more hiring activity at present, whereas large multinational organizations with a presence in Canada have been slower to, and shown more caution when, making permanent hiring commitments,” she said.
Canada saw more hiring in government and non-profit organizations last month, along with telecommunications and manufacturing.
Indeed, manufacturing – while still below levels of prior years – has been a bright spot for job creation. Factories added 36,000 positions last month, continuing a hiring streak that began in November. In fact, manufacturing hiring in the past six months has been the strongest on record.
More Canadians joined the ranks of the self-employed, however. About 23,300 people turned to self-employment, while the public sector added 6,900 jobs and the private sector shed 22,500 positions. The construction industry shrank by 27,000, reversing the gain of a month earlier.
By city, Regina has the country's lowest jobless rate, at 3.9 per cent, followed by Calgary and Edmonton. Windsor, Ont., has the highest, at 9.9 per cent.
By province, employment rose in Alberta and New Brunswick, while it fell in Prince Edward Island. Alberta's jobless rate fell to 4.5 per cent last month, the lowest level since December, 2008. The province's employment growth in the past year, at 4.1 per cent, is the fastest in the country and far exceeds the national average of 1.2 per cent.
Young people have yet to benefit from broader employment gains. Youth unemployment hit 14.3 per cent last month, up from 13.9 per cent in April. The student jobless rate is 14.9 per cent.
“Youth employment is roughly at the same level as in July, 2009, when the labour market downturn hit a low,” the government agency said.
The labour market is showing resilience for now, but dark clouds are gathering. Housing starts are slowing, exports are falling and Europe's woes are starting to dent confidence closer to home. Some economists see the pace of hiring subsiding, as a result, in the coming months.