Canadian Employment Update – May 2025: Stagnation Persists Amid Rising Unemployment

Canada’s labour market showed little movement in May 2025, reflecting ongoing challenges in achieving robust job growth. According to the latest data, employment across the country remained nearly flat, with a modest gain of 8,800 jobs, bringing the total to 20.978 million. The employment rate held steady at 60.8%, but the unemployment rate ticked up by 0.1 percentage points to 7.0%—a level not seen since September 2021.

Wage growth provided a silver lining, with average hourly wages rising 3.4% year-over-year to $36.14. Total hours worked also saw a slight increase of 0.9% compared to May 2024, indicating some resilience in labour input despite the sluggish job creation.

Regional Spotlight: British Columbia and Metro Vancouver

In British Columbia, employment edged up by 0.4%, adding 13,000 jobs to reach 2.963 million. Metro Vancouver saw a slightly stronger increase of 0.9%, with employment climbing to 1.715 million. However, unemployment rates in both regions rose, with B.C.’s rate increasing by 0.2 points to 6.4% and Vancouver’s by 0.3 points to 6.6%. These upticks signal persistent softness in the provincial labour market.

A Familiar Trend: Stagnation and Rising Unemployment

May’s employment figures mirror April’s trends: minimal job gains paired with rising unemployment rates. The national unemployment rate hitting 7.0% underscores a labour market struggling to regain momentum. This weakness comes against a backdrop of global economic uncertainties, adding pressure on policymakers to respond.

The Bank of Canada’s recent decision to hold interest rates steady may face scrutiny following this report. With the labour market showing signs of strain, a 25-basis-point rate cut at the July meeting could provide a much-needed boost to stimulate job creation and support broader economic recovery.

As Canada navigates these challenges, the coming months will be critical in determining whether the labour market can shift from stabilization to growth. For now, the data paints a picture of a market treading water, with cautious optimism tempered by rising unemployment.