Ottawa-Gatineau’s unemployment rate rose sharply in May amid a surge in the number of people entering the workforce, Statistics Canada said Friday.
The number of employed residents in the region grew by about 1,800 last month to 769,100, the agency said in its latest labour market report.
But the size of the region’s labour force – which includes people who are actively looking for work – increased by 9,500 to an all-time high of 832,000 as unemployed workers who were on the sidelines earlier in the pandemic began resuming their job search.
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As a result, the jobless rate in Ottawa-Gatineau jumped by nearly a full percentage point last month to 7.6 per cent, up from 6.7 per cent in April.
Despite continued public health restrictions that kept in-person services at many businesses closed in a bid to curb the spread of the coronavirus, most key sectors of the local economy held steady when it came to employment figures last month.
Industries such as retail and food services that have been pummelled by the COVID-19 crisis stayed relatively flat in May, as did the region’s largest employer, the public administration sector.
Canadian economy loses 68,000 jobs
Meanwhile, industries such as construction (which added a net 4,900 jobs), tech (up 2,000 positions) and health care (up 1,300 jobs) posted gains last month.
While more people jumped back into the job market in the capital, across the country as a whole, the picture was quite different in May.
Statistics Canada says the economy lost 68,000 jobs last month 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 national 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, meaning 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 women between the ages of 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.
Manufacturing takes dip
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, which 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, 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.
– With additional reporting from the Canadian Press