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A slowing economy is driving more Canadians to part-time work and derailing some young Canadians’ efforts to get early work experience, according to the latest jobs data.Canada’s unemployment rate rose in May despite a gain of 27,000 jobs, Statistics Canada said Friday.The unemployment rate now stands at 6.2 per cent, up a tick from 6.1 per cent the month previous.Canada’s population was growing at a pace faster than employers were adding jobs, StatCan said.Gains in sectors including health care and social assistance, finance and real estate and food and accommodation were offset by losses in construction, transportation and warehousing and utilities last month.Growth was wholly in part-time positions (up 62,000 jobs), according to the agency, whereas net full-time employment shrank (down 36,000 jobs).Story continues below advertisementThe May job figures come as the Bank of Canada delivered its first interest rate cut of the cycle on Wednesday, with officials saying there’s room for the economy to keep growing even as inflation cools.More Canadians turn to part-time workMore Canadians are also turning to part-time work as a matter of need, not choice, the data shows.StatCan noted that the proportion of employees doing part-time jobs involuntarily because they can’t find full-time work was up to 18.2 per cent in May, an increase from 15.2 per cent a year earlier.Brendon Bernard, senior economist at job-search site Indeed, tells Global News that this marks a shift from the labour market’s pandemic recovery, which was led by full-time work.Another segment of the market showing signs of weakness in May was youth employment, with Statistics Canada noting last month marked the start of the crucial summer job season for this demographic.Story continues below advertisementThe agency noted a decline in the employment rate of returning students aged 20-24 in May, down to 61 per cent from 63.9 per cent a year ago.Bernard says there’s a connection between a growing number of workers turning to part-time work and a slow start to the summer job season for students.When employment prospects for established workers weaken, they might turn to seasonal or precarious work to get their hours, Bernard explains. These jobs – often in retail or the food and accommodations sectors – are the typical starting points for youth getting their first work experiences between semesters, he notes.Students therefore could be boxed out between existing workers trading down to seasonal work and employers slowing their hiring in a cooling economy, he says.Canada will need to see an economic turnaround to “grease the wheels” for youth trying to get into these entry-level positions, Bernard says.“We’re right now kind of stuck in neutral. And that’s causing a bit of a traffic jam for people entering the job market.” 1:47Canada’s GDP grew 1.7% in 1st quarter — What do you need to know?Will rate cuts help businesses hire?Tu Nguyen, economist with RSM Canada, tells Global News that another pressure driving up the youth unemployment rate in particular is competition from immigration.Story continues below advertisementTemporary foreign workers and international students landing in Canada will often default to part-time work before landing a full-time job, she says.The email you need for the day’s top news stories from Canada and around the world.Get daily National newsGet the day’s top news, political, economic, and current affairs headlines, delivered to your inbox once a day.Sign up for daily National newsletterSign UpBy providing your email address, you have read and agree to Global News’ Terms and Conditions and Privacy Policy.But Nguyen notes that incoming caps from the federal government on international students should help reduce competition for the increasingly scarce job openings in the Canadian market.“Those jobs will most likely go to workers who are already in the country and that will perhaps keep the youth unemployment rate from rising much higher,” she says. 2:15Universities’ and colleges’ growing deficits, layoffs concern unions across countryLeslie Preston, senior economist at TD Bank, said in a note to clients Friday that the Canadian economy “geared down” after a robust jobs report in April.“The economy has cooled, but it has not fallen off a cliff,” she said.Bernard says that even with an interest rate cut from the Bank of Canada, he doesn’t expect the economy to pick up steam anytime soon.Story continues below advertisementDespite a rising unemployment rate, the Canadian economy has not suffered a steep rise in job losses, he notes, which is more typical of severe recessions.“We haven’t seen the dam break where layoffs have really surged,” Bernard says.Rather, there’s been a gradual “cooling” in the labour market that he expects will persist even as the Bank of Canada shifts into an easing cycle.Lower borrowing costs for employers can open the door to a bit more of a pickup in hiring in the second half of the year, Nguyen says.Trending NowOlympic triathletes fall ill after River Seine swims. What we know so farSimone Biles says ‘weird’ crowd affected Olympic final after falling on beamBut she says she expects that businesses will need to see more easing in the central bank’s policy rate before they can “aggressively” accelerate their hiring paces, something she doesn’t expect until 2025.Will strong wages spook the Bank of Canada?In Canada, average hourly wages also accelerated to 5.1 per cent in May, up from 4.7 per cent in April.Story continues below advertisementThe Bank of Canada said earlier this week, after reducing its benchmark interest rate for the first time in more than four years, that it would be watching the pace of pay hikes as it determines the pace of future rate cuts.BMO chief economist Doug Porter said in a note Friday that while wages were the “troubling” aspect of the May jobs report, he suspects signs of weakness elsewhere in the labour market will tell the Bank of Canada that it’s “a matter of time before wage growth relents.” A rising unemployment rate counters the stickiness in wages, he said.Strength in the U.S. jobs market might have more of a weight on the Bank of Canada’s next rate decision than the domestic report, Porter suggested. 1:54What does Bank of Canada’s 1st interest rate cute since 2020 mean for household budgets?Employment figures released in the United States on Friday show the American economy continues to add jobs at a robust rate. U.S. employers added 272,000 positions last month, though the unemployment rate edged up to 4.0 per cent from 3.9 per cent a month previous.Story continues below advertisementStrong jobs growth south of the border is pushing back expectations for the rate easing cycle to begin in the U.S., Porter noted.Bank of Canada governor Tiff Macklem acknowledged this week that there is a limit to how much the Canadian central bank’s policy rate can diverge from its U.S. counterpart, but that they are not currently close to those limits. Porter, too, said that a pair of upcoming inflation reports will have the most bearing on the Bank of Canada’ next rate decision on July 24 than May’s jobs report.More on Money‘Not at all time to panic’: What Canadians should know amid market volatilityAnother baby cereal is being recalled in Canada over Cronobacter fearsChristmas in summer? Why holiday items are appearing in stores so earlyAirTags only go so far: A new partnership is filling Canada’s car theft gapBernard says he’s been surprised by the resiliency of wages as the rest of the labour market cools, but adds he expects these rates will slow in the months ahead as well.But the good news from the Bank of Canada’s perspective is that the robust wage growth over recent months has yet to translate into inflationary fuel s, with overall price pressures still showing signs of easing, he says.This gives the central bank more time to be patient on the wage front as it prepares for the timing of its next interest rate cut, Bernard argues.“From the Bank of Canada’s point of view, while wage growth is definitely part of the calculus for the overall outlook for rates, it’s just one ingredient,” he says. “And I think at the top of the list is inflation itself.”Story continues below advertisement– with files from the Associated Press 2:11Bank of Canada drops key interest rate by 0.25%