Statistics Canada says the economy lost 68,000 jobs in May as lockdowns to slow the spread of COVID-19 continued.
The losses marked the second consecutive month of declines after 207,000 jobs were lost in April.
The unemployment rate was 8.2 per cent in May, little changed from the 8.1 per cent in April because the number of unemployed people in Canada overall stayed relatively steady.
What changed is that more people dropped out of the labour force in May, including workers who simply got discouraged and gave up looking for work.
The statistics office says there were 49,700 discouraged job-searchers last month, or 9.3 per cent, those who wanted work but did not look for work, more than twice the average of 22,000 seen in 2019.
Friday's data release also notes that 28,000 more core-aged women, those between age 25 and 54, didn't look for work in May as third wave restrictions continued in Ontario and other regions of the country.
Statistics Canada says the unemployment rate would have been 10.7 per cent in May had it included in calculations those people who wanted to work but didn't search for a job.
May's job losses put the country about 571,100 jobs, or three per cent, below pre-pandemic levels seen in February 2020.
But the actual gap may be larger once adjusting for population growth during the pandemic, which would put the labour market about 763,000 jobs, or 3.9 per cent below the February 2020 levels.
Statistics Canada says employment in goods-producing sectors dropped for the first time since April 2020, including in manufacturing that saw a decline of 36,000 jobs in May.
Despite the losses, economists expect things will improve over the coming months as provinces are set to loosen restrictions and reopen economic activity like after the second wave of the pandemic, says TD senior economist Sri Thanabalasingam.
"Except this time the acceleration in the vaccine rollout may provide employers with added confidence, thereby boosting hiring intentions," he writes in a note.
But he adds that fewer people in the job market could mean the country faces labour shortages just as demand for workers is set to recover.
Here's a quick look at Canada's May employment (numbers from the previous month in brackets):
Here are the jobless rates last month by province (numbers from the previous month in brackets):
Statistics Canada also released seasonally adjusted, three-month moving average unemployment rates for major cities. It cautions, however, that the figures may fluctuate widely because they are based on small statistical samples. Here are the jobless rates last month by city (numbers from the previous month in brackets):
This report by The Canadian Press was first published June 4, 2021
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