Quebec: Job Market Holds Up Better than Expected in May

The decline in employment is not entirely unexpected, as much of last month’s gains were driven by the temporary hiring of workers ahead of the federal election. That said, the underlying details remain encouraging, and today’s figures have surpassed expectations, suggesting a labour market that continues to show resilience despite short-term fluctuations.

The impact of the ongoing trade war is becoming increasingly evident, with manufacturing employment posting a fourth consecutive monthly decline—amounting to a cumulative loss of nearly 10,000 jobs since the start of 2025. Hard data confirms the broader economic slowdown, most notably the sharp drop in Canadian exports to the United States recorded in April External link.. These external pressures are expected to continue posing significant challenges for industries closely tied to international trade and production.

The construction sector has also seen significant job losses. This trend is occurring at a time when the industry is called upon to play a key role in the completion of the infrastructure projects announced, as well as in meeting the significant needs of the residential sector. As a result, the weakness in employment is unlikely to last in this sector, which is outperforming the national trend in Quebec.

The ongoing increase in labour market slack is contributing to a moderation in wage pressures. In May, wages rose by 2.6% year-over-year, marking the slowest pace in nearly four years.

Overall, today’s figures point to a labour market that is holding up better than expected. While signs of the economic slowdown are emerging in certain sectors, the strength of key indicators suggests that the shock has yet to spread broadly across the economy. Whether weaker confidence and uncertainty will eventually weigh more heavily on service industries remains to be seen. For now, volatility persists—as highlighted by the recent hike in steel and aluminium tariffs.