Canadian Employment Preview: Forecast from four major banks, additional jobs gain in May

Canada will release May employment figures on Friday, June 10 at 12:30 GMT and as we get closer to the release time, here are forecasts from economists and researchers at five major banks regarding the upcoming employment data. 

Another 30K new workers are expected in May, following April’s gain of 15,3K. The unemployment rate should remain at 5.2% and the participation rate is also forecast to be unchanged at 65.3% just 0.3 points below its final pre-pandemic level.

TDS

“We look for the Canadian labour market to rebound with 35K jobs created in May following the muted performance in April. This reflects a solid increase for mobility trends, record job vacancies, and the sharp drop for COVID-19 infections after the post-Omicron wave. A 35K print would leave UE unchanged at 5.2% (after rounding), but we should see wage growth firm into the high 3s.”

RBC Economics

“We expect a gain of 15K jobs – matching the increase in April. Employment growth has slowed dramatically in recent months, but not due to any shortfall in labour demand. Canada's number of job openings was still running ~70% above pre-pandemic levels in May. But the number of workers available for hire is now minimal, with the unemployment rate at 5.2% in April, its lowest level since at least 1976. And labour shortages are widespread by sector. That means additional demand for workers from now on will show up more in wage growth than in employment counts.”

NBF

“Employment gains should still be more modest than those seen earlier this year given the limited number of workers still on the sidelines. Our call is for a 20K increase. Such an improvement of the labour market would leave the unemployment rate unchanged at 5.2%, assuming the participation rate remained at 65.3%.”

CIBC

“Employment likely continued to move higher in May, albeit much more muted than seen earlier in the year. Hiring in rebounding service areas such as food and accommodation and transportation likely drove the increase, but sectors such as construction and real estate, which appear to already be slowing down due to higher interest rates, may have stalled or moved in the opposite direction. A 30K gain in jobs overall would be close to the pace of population growth and leave the unemployment rate unchanged at 5.2%, assuming no move in labour force participation.”