08:15 AM EDT, 06/09/2025 (MT Newswires) -- Canada's May Labour Force Survey (LFS) showed an 8,800 gain, beating the consensus decline of 10,000, noted Rosenberg Research after Friday' data.

Given the massive volatility, month to month, Rosenberg Research advises not to focus too much on the consensus beat and look at the trendline.

The unemployment rate rose to 7.0%, the same as the consensus. That's now the highest since September 2021, around 1.3 percentage points above a "neutral" rate of unemployment, and is a sign of massive and still-growing slack in the labor market, said Rosenberg.

All of this means that in 2025 so far, total employment is up just 60,700, the slowest five-month pace since May 2021. The two-year run-up in the unemployment rate is now up 1.8 percentage points -- same as April and up from +1.7 in March -- and is a clear recession indicator, it stated.

At the industry level, the most cyclically sensitive sectors are hurting. Goods sector payrolls fell for the fourth consecutive month, by 13,000, with services up 21,800. Manufacturing fell by 12,200 and construction fell by 7,400 (now down for four straight months). Wholesale and retail trade rose by nearly 43,000, driving a lot of this report.

The hourly wage rate for permanent employees came in at +3.5% year over year, against the consensus of 3.2% higher, and the same as April's 3.5%. Rosenberg has been very confident in predicting wage deceleration all year given the slack in the labor market, and although there was a tiny beat to consensus, this is still tied for the third-slowest wage growth since April 2022 and makes the Bank of Canada's job easier.

One of the brighter spots is the full-time/part-time split, added Rosenberg. Full-time jobs rose by 57,700 while part-time jobs fell 48,800. The participation rate was unchanged and met the consensus of 65.3%. The working age employment rebounded by 26,300, after falling 30,000 last month and 12,000 the month before.

At the regional level, employment rose by 3,400 in Ontario and by 13,000 in British Columbia. Alberta struggled with the low energy price, seeing a drop of 1,700, which is 8,600 lower year-to-date.

Rosenberg keeps noting that weak growth is a downward pressure for the Canadian dollar (CAD or loonie), and the recent run-up is mostly a mirage reflecting US dollar weakness rather than true Canadian dollar strength.

The mediocre jobs picture makes the BoC's decision to pause last week look incrementally worse in retrospect, according to Rosenberg.