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Canada gains surprise 289,600 jobs in May, jobless rate hits record

imageEconomic Indicators13 hours ago (Jun 05, 2020 01:45PM ET)

(C) Reuters. A “Help wanted” sign is seen in the window of a bakery in Ottawa

By Kelsey Johnson and Julie Gordon

OTTAWA (Reuters) – Canada unexpectedly gained 289,600 jobs in May even as the jobless rate hit a record high at 13.7%, data showed on Friday, buoyed by the loosening of stay-at-home restrictions in parts of the country.

The job gains were far better than expected. Analysts in a Reuters poll had predicted a loss of 500,000 jobs and an unemployment rate of 15.0%.

“I think this probably counts as the largest job gain in Canadian history for one month, but it’s also still just a drop in the bucket in terms of recovering the lost jobs over March and April,” said Nathan Janzen, senior economist at RBC. Canada lost a record-breaking 2 million jobs in April.

The Canadian dollar climbed to a three-month high at 1.3395 per U.S. dollar or 74.65 U.S. cents. The United States, Canada’s largest trading partner, also posted surprise gains for May.

Prime Minister Justin Trudeau said on Friday the government has approved more than 300,000 applications for its wage subsidy program, which he said was keeping “millions” employed, and that roughly 1.2 million Canadians who had been receiving federal income support each month no longer need it.

“This is encouraging news, but we’re nowhere near done,” he said.

The May data did not capture the 1.4 million people who temporarily lost their jobs due to COVID-19 closures, but are not currently looking for employment, StatsCan said. Had those numbers been counted, the May unemployment rate would have been 19.6% rather than 13.7%.

The record jobless rate was driven in part by students entering the summer job market who must be actively seeking work to get government COVID-19 benefits. The unemployment rate for returning students surged to 40.3 percent compared with 13.8 percent in May 2019, Statscan said.

Employment in the goods producing sector gained 164,700 jobs, while services sector gained 124,900 positions.

Canada gains surprise 289,600 jobs in May, jobless rate hits record

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