Canadian job gains in May best since 2002

Canada's economy had its best month for job creation in more than a decade last month, adding 95,000 new jobs, according to Statistics Canada.

A consensus of economists had been expecting Canada to create only about 15,000 jobs during the month.

The gain reported Friday was more than three times as much as the most optimistic expectation among closely watched economists.

'It is equivalent to the U.S. adding over one million jobs in a single month.' —Scotiabank

"All of the employment gains in May were among private-sector employees, offsetting losses over the previous two months for this group," the data agency said.

The large gain pushed unemployment down a tenth of a percentage point to 7.1 per cent. The strong showing was one of the best headline numbers on record. The last time more jobs were created in any given month was August 2002, when the economy cranked out 95,100 new positions.

Although he cautioned that the monthly data can often vary wildly from month to month, Finance Minister Jim Flaherty said "May job’s numbers are a good sign that our economic policies are helping steer the economy in the right direction.

"Even better, the jobs created in May were mainly full time and in the private sector – the types of jobs that will help support a sustained recovery," Flaherty said.

Others reacted even more positively to the strong showing.

"Canada's job gain … is simply stunning on the headline and most of the details," Scotiabank economists Derek Holt and Dov Ziegler said in a note. "It is equivalent to the U.S. adding over one million jobs in a single month."

The two were especially heartened by an uptick in the number of jobs for young people. There were 54,000 more people between ages of 15 and 24 with jobs last month.

Ziegler and Holt added in their note: "We don’t yet have colour on why the May hiring market was so much stronger than normal for youths, but we’ll take it. 'Europe, send your youth to Canada' may be the underlying message!"

Others were more cautious. As BMO economist Doug Porter noted, "Before racing to conclusions that the economy is suddenly on a tear, note that the spectacular monthly gain simply offsets a prolonged period of softness in Canadian jobs to start the year."

Indeed, a deeper look into the numbers shows the gain was not entirely broad-based.

Construction industry leads gains

By sector, the construction industry added 42,700 new jobs during the month — almost half of the total.

Regionally, Ontario, Quebec and Alberta accounted for almost all of the gains, as four of the other seven provinces reported job losses last month.  Every province from Manitoba eastward saw its jobless rate drop, while the three western provinces reported somewhat higher jobless rates.

"No question this is a staggering report, which puts a much healthier glow on the outlook for Canadian growth," Porter said. "[But] even with the big move, the three-month trend is actually a bit below average for job growth."

"Shiny, sparkly headline, dull, dreary trend," Porter noted.