Following little change in April, employment rose by 95,000 in May, according to Statistics Canada.
It was the largest increase since August 2002. Economists were only expecting 15,000 jobs to be created.
The gain pushed the country’s unemployment rate down by 0.1 percentage points to 7.1%—the lowest level in four months.
Most of the job growth was in the construction, retail and wholesale trade, and repair and business support services sectors.
In May, employment increased in Ontario, Quebec, Alberta, New Brunswick and Manitoba, while it declined in Prince Edward Island.
“The gradual tightening in labour market conditions is consistent with a shift in the inflation rate toward 2% during the next six quarters,” says a note from RBC Economics. “This implies little urgency for the Bank of Canada to start raising official rates with the current overnight rate of 1% expected to be maintained until the middle of next year.”