Canadian May employment data surprised on the upside

Canadian employment increased sharply in May, rising by 59,000 net new jobs following a 20K drop in April. The unemployment rate held steady at 6.8%. Today's reading was stronger than consensus expectations which had called for a 10K increase.

Looking ahead, job creation in Canada is forecast to decelerate as 2015 progresses. With an outright contraction in real GDP in Q1, the hit to the Canadian economy from lower oil prices was stronger than previously anticipated. 

What's more, economic activity is projected to remain weak in Q2 with real GDP growth not forecast to return to above 2% (annualized growth) until the second half of 2015. As such, we expect employers to increasingly focus on extracting efficiency gains through the remainder of this year, said TD Economics

The regional divide in near term economic prospects was on display in today's report. Indeed, employment in both Ontario and B.C. surged in May while Alberta recorded a decrease in employment. This regional divide is forecast to persist as the impact from lower oil prices resonates through the Alberta economy.