Statistics Canada reported Friday that Canada’s labour market rebounded sharply in May, adding far more jobs than analysts had expected. The strong result comes just days before the Bank of Canada’s (BoC’s) interest-rate decision on June 10, adding a new variable to an already complicated policy picture.

• Canada added 87,800 jobs in May, the biggest monthly gain since December 2024 and well above analyst forecasts of just 10,000 positions. The unemployment rate dropped to 6.6% from 6.9% in April.
• Full-time work drove the gains, with 154,000 full-time positions added even as part-time work declined. Construction, information and recreation, and accommodation and food services were among the leading sectors.
• May’s result helped reverse a string of job losses. Canada had shed roughly 112,000 net jobs in the first four months of 2026, so this rebound erased much of that decline.
• Wage growth moderated. Average hourly wages for permanent employees rose 3.2% year over year in May, slowing from 4.8% the prior month.
• South of the border, the US economy added 172,000 jobs in May, nearly double what economists had forecast. The unemployment rate held at 4.3%, and the strong data pushed bond yields higher as investors scaled back expectations for near-term US Federal Reserve Board interest-rate cuts.

Canada’s jobs rebound is an encouraging sign, but the broader picture remains mixed, with indications the Canadian economy is still operating below its potential. The BoC will weigh the jobs data carefully alongside inflation trends and slowing economic growth as it heads into its June 10 interest-rate decision. Both Canada’s and the US’s strong job numbers reflect a surprising level of resilience, giving policymakers on both sides of the border plenty to consider.  

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