Canada’s jobless rate rises to 6.2% in May

The report suggests the Canadian job market continues to soften as high interest rates weigh on consumers and businesses.

Canada’s unemployment rate continued its upward climb in May, rising slightly to 6.2 per cent as opportunities became harder to find for prospective jobseekers.

Statistics Canada’s latest survey showed the economy added 27,000 jobs last month – too modest of a gain to keep the unemployment rate from rising by a tenth of a percentage point.

The report suggests the Canadian job market continues to soften as high interest rates weigh on consumers and businesses.

“It didn’t take much digging to unearth the fact that this report is considerably softer than the headline, as all of the gains were in part-time jobs, in one province (Ontario), and the unemployment rate ticked up to 6.2 per cent, as expected,” wrote BMO chief economist Douglas Porter in a client note.

Of those who were unemployed in April, just under a quarter found work the next month, the report said. That’s below the pre-pandemic average of 31.5 per cent for the same months in 2017, 2018 and 2019.

“A lower proportion of unemployed people transitioning into employment may indicate that people are facing greater difficulties finding work in the current labour market,” the report said.

More Canadians are also finding themselves working part-time because they don’t have better options.

Statistics Canada says the involuntary part-time rate, which refers to the proportion of part-time workers who could not find full-time work or worked part-time because of weak business conditions – was 18.2 per cent in May. That’s up from 15.4 per cent a year prior.