- Scott Smith, a senior market analyst at Cambridge Global Payments
Canada's labour force received a boost in May, largely due to a surge in in private-sector work that more than offset April's losses, Statistics Canada said. Canada's economy created 59,000 jobs in May, far exceeding economists' expectations of a modest 5,000-to-10,000 increase in jobs. Nonetheless, the national unemployment rate in May remained stubbornly locked at 6.8% for the fourth consecutive month, after more people entered the workforce. The private sector added 56,800 positions, while the public sector cut jobs. The most active industry was manufacturing, with 22,000 more people employed there. Also, another 21,000 people were hired in the health care and social assistance.
Statistics Canada released data showing the economy contracted at an annualized rate of 0.6% in the first quarter of 2015, a dismal result that led to a streak of downgraded economic projections on how the rest of the year will play out. However, Canada is expecting to enjoy a recovery in the second and third quarters of this year. The Bank of Canada kept its interest rate unchanged at 0.75% for a third consecutive meeting, after slashing it by 25 basis points back in January. The bank stressed that growth and inflation are in line with expectations, adding that economic recovery is on the horizon.
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