Ottawa, June 6, 2025 – Canada’s unemployment rate rose to 7.0% in May, reaching its highest point since September 2016, excluding the pandemic years. This marks the third consecutive monthly increase, with the rate up from 6.9% in April and a total rise of 0.4 percentage points since February.
Despite the uptick in unemployment, the Canadian economy added 8,800 jobs in May. Economists noted that while the overall job market showed resilience, certain sectors, such as manufacturing, experienced declines. Doug Porter of BMO Capital Markets highlighted the encouraging growth in full-time employment but pointed out ongoing weaknesses in specific industries.
The youth demographic faced particular challenges, with unemployment rates among individuals aged 15 to 24 higher than the previous year.
Average hourly wages for permanent employees increased by 3.5% year-over-year in May, indicating some wage growth amid the labor market shifts.
Economists suggest that the recent labor market data could influence the Bank of Canada’s monetary policy decisions, with some anticipating a potential interest rate cut in July, depending on forthcoming economic indicators.
