Canada's job market shed 68,000 jobs in May amid third-wave pandemic restrictions. Statistics Canada says almost all of the drop was in part-time work.
The number of jobs lost is more than twice what many economists had forecast. The unemployment rate was little changed at 8.2 per cent.
Manufacturing fell for the first time since April 2020, shedding 36,000 jobs.
Lockdowns led to 29,000 retail trade jobs lost and 24,000 other service sector jobs.
Jim Mitchell, president of HR consulting firm LHH, says government benefits may keep some workers from going back to work.
“As Canada continues to battle the uneven recovery and reopening of the labour market, the next question on the horizon is whether or not the range of lower-paying jobs will attract Canadian workers back, or if that portion of the workforce will stay settled with the various government subsidies programs offered at a federal level," said Mitchell
“Similar concerns arose towards the end of the first wave in June 2020, as small businesses and highly affected industries struggled to stay afloat, such as hospitality and retail.”
Bright spots in Canada's job market
Transportation, warehousing, and natural resources added jobs. In fact, Statistics Canada says natural resources is furthest along, surpassing February 2020 levels by 29,000.
Hours worked was relatively unchanged, as was the number of people working from home, at 5.1 million.
Ontario and Nova Scotia accounted for the bulk of job losses, while the rest of the provinces were little changed. Saskatchewan was a standout, being the only province where employment increased in May.
But as Ontario gets ready to reopen parts of its economy this month, the June numbers could be dramatically different.
“As Quebec, British Columbia and Alberta have already re-opened many high-contact services, and Ontario is likely to follow suit in time to catch the reference week for the June LFS, it seems likely that employment will rebound by at least 200,000 this month,” said Stephen Brown, senior Canada economist at Capital Economics.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.