As we look for signs of a cooling job market in the face of high interest rates, Alberta’s economy added 3,900 jobs in May for a modest increase of 0.2%.

Full-time employment was essentially unchanged (+900) with an uptick in part-time positions (+3,000).

Gains were concentrated in the goods sector (+6,100), with construction leading the pack, partly offset by a pullback in service employment (-2,200). There was no noticeable impact of the wildfires on oil and gas employment, as jobs in that industry held steady despite production disruptions.

The slight increase in jobs combined with a small decrease in the number of people looking for work brought the provincial unemployment rate down to 5.7% in May from 5.9% in April.

So far this year, Alberta employment has jumped 3.5% over the same period last year, outpacing the national gain of 2.4% and ahead of all provinces except New Brunswick and PEI.

The May numbers are broadly in line with our latest forecast of 2.8% annual average employment growth for the year, which assumes that employment will stay fairly flat for the rest of 2023 as the sharp rise in interest rates works its way through the economy.

After a strong first quarter (+35,000), employment has held steady in April and May (+2,000). We expect strong migration to the province, which boosts consumer and housing activity, and increased energy sector activity to offset some of the economic drag in Alberta from higher interest rates. And with job vacancies elevated (at 91,000 in March) many employers will keep hiring.

Nationally, employment surprised to the downside with total employment falling slightly by 0.1% (-17,300). This was the first decline since last August. A Reuters survey showed that analysts had expected a small gain of 23,200. Full-time jobs contracted by 0.2% while part-time positions managed to grow by 0.4%.

The headline drop, however, masks some underlying strength, as core-age employment (25-54) posted a strong gain. The losses were concentrated among youth, which Statistics Canada attributes to a slower start to summer hiring. 

Unlike in Alberta, the loss of jobs combined with an increase in the number of people looking for work drove the national unemployment rate up to 5.2% in May from 5.0% in April, the first increase in the national unemployment rate in nine months.

Wage growth remained elevated, with average hourly earnings up 5.1% in May (year-over-year) although slightly lower than the 5.2% increase the previous month.

The Bank of Canada will be looking for signs the labour market is softening ahead of their July decision. This jobs report, if combined with further indications that the economy is cooling, could lead the Bank to hold in July after its surprise 25 basis-point increase on Wednesday, though wage growth in this survey is still hotter than what the Bank would like to see. The Bank will be looking closely at May’s inflation reading later this month, and another jobs report in July before making its decision.

*The Labour Force Survey estimates for April are for the week of May 14 to 20, 2023.

Answer to the previous trivia question: Peloton literally means ball in French and is also used to refer to a group, squad, or platoon. In cycling, it refers to the main group or pack of riders in a road race.

Today’s trivia question: How many residents did net international migration add to Alberta’s population during the third quarter of last year (hint: it was a record high)?