Unemployment Up Amid Higher Participation
Toronto’s labour market sent mixed signals in May 2025, reflecting early uncertainty stemming from the recent implementation of U.S. tariffs. The unemployment rate rose slightly to 9.1% (up from 8.7% in April), reversing a brief improvement from the previous month. While the city’s jobless rate remains significantly higher than Ontario’s (7.5%) and Canada’s (6.8%), the full effects of the new trade restrictions are yet to fully materialize. With many sectors dependent on cross-border trade, Toronto faces potential additional employment pressure in coming months.
Year-over-year, unemployment is up from 8.2% in May 2024, reflecting that job growth has not kept pace with a swelling labour force. Encouragingly, more people are working or seeking work. The employment rate held at 61.9% in May – near its recent high and up from 60.8% a year ago – indicating a larger share of Torontonians are employed. Likewise, the participation rate climbed to 68.2%, about 2 full points higher than last May. This robust labour force growth is a positive sign, but with unemployment still elevated, it suggests many new job seekers have yet to find positions. Total employment in the Toronto CMA stands at approximately 3.73 million in May 2025, about 2% higher than a year ago. In short, more people are in the job market than last year, but not all are finding jobs as quickly, leading to a slight uptick in joblessness. These dynamics highlight an economy in cautious transition. Ongoing trade uncertainties and higher costs continue to pressure certain industries, even as sectors like hospitality and finance add jobs. Toronto’s labour market remains stabilized but fragile – bolstered by a growing workforce and steady hiring in some areas yet still contending with higher unemployment than the rest of Canada as the region adjusts to post-pandemic and trade-war challenges.
Toronto Wages – Modest Growth and Sustained Premium
Wage trends remained relatively stable. The average hourly wage in Toronto ticked up to about $38.7 in May, from $38.52 in April. This marks a modest increase and roughly a 3% gain year-over-year, indicative of steady wage growth despite the economic headwinds. Toronto’s wages continue to outpace both the provincial and national averages – the city’s $38.70/hr compares to roughly $36.1/hr nationally and around the mid-$37 range in Ontario. This sustained wage premium reflects the competitive demand for skilled workers in Toronto’s high-cost, high-productivity economy. However, wages remain below the peak seen in late 2024 (when the average topped $40). Increases have been incremental rather than explosive. Notably, Toronto’s average wage is still about 6-7% higher than the Canadian average, a gap driven by the concentration of higher-paying industries (finance, tech, professional services) and the city’s elevated living costs. Despite recent economic turbulence, wage growth has proven resilient – employers have largely kept pay on an upward trajectory, especially in sectors like finance and insurance which continue to compete for talent. This bodes well for workers’ purchasing power, even as inflation and interest rates remain concerns.
Sector Performance – Gains in Services, Weakness in Goods and Construction
Toronto’s sector-level employment trends in May 2025 paint a picture of an uneven economy due to the spectre of US Tariffs. Several service-oriented industries have expanded significantly over the past year, while many goods-producing and trade-sensitive sectors have struggled or stalled:
Finance and Insurance: Continued strong momentum, with employment up +7.4% year-over-year to about 455,500. This sector remains a pillar of growth, though its YOY increase moderated slightly from earlier double-digit gains as the financial industry stabilizes at high employment levels.
Hospitality and Tourism: Achieved a +9.5% surge to roughly 178,600 employed, as the post-pandemic travel and dining rebound endures. Hotels, restaurants, and entertainment venues have sustained their recovery, though total employment is still rebuilding from earlier lows.
Creative Industries (Arts, Culture, Recreation): Grew by approximately +6.1% to 165,100 jobs. Creative sectors are recovering as events and productions resume, contributing to Toronto’s cultural and economic vibrancy.
Education and Public Administration: Increased +7.4% year-over-year, now at about 399,900 jobs. Schools and government agencies have added workers, likely reflecting investments in public services and catch-up hiring after prior constraints.
Scientific and Technical Services: Essentially flat to slightly up (+1.1% YOY). Employment in tech, science, and professional services (524,900) is marginally above last year’s level, indicating this white-collar sector has stabilized after a slight dip. Earlier in the year it had seen small declines, so the current level suggests a return to modest growth.
Wholesale and Retail Trade: Also little changed at +1.5% YOY (533,000 jobs). Retailers and wholesalers have not fully recovered to pre-2024 momentum; consumer spending has been cautious, keeping employment in this sector only slightly above last year’s volume.
Manufacturing: Stalled out at last year’s level. Manufacturing employment (345,800) is virtually flat (0%) year-over-year, a sharp turn from the 6% gains seen just a month ago. After growing through early 2025, factory employment slipped in the spring – reflecting tariff-related headwinds and possibly some recent layoffs. This loss of momentum in manufacturing is a red flag that trade conflicts and cost pressures are dampening Toronto’s industrial rebound.
Business, Building and Other Support Services: Weakened after previous growth – now –3.4% YOY (down to ~132,000 jobs). This category (which includes admin support, waste management, etc.) had been a growth area, but employment has dipped below last year’s level, suggesting recent cutbacks or completion of temporary projects.
Construction and Utilities: Continues to decline, now –3.0% year-over-year at about 223,100 workers. The construction industry’s slowdown persists as high interest rates and uncertainty over major projects curtail hiring. Some large projects have paused, and new development has cooled, reducing labour demand in both construction trades and related utility work.
Transportation and Warehousing: Hit hardest, with employment down –10.3% to roughly 209,800 – an even steeper drop than a month ago. This reflects ongoing struggles in freight, transit, and logistics. Elevated fuel costs, supply chain adjustments, and the U.S. tariff war have led to cutbacks in trucking, air transport, and warehousing jobs in Toronto. This sector’s decline underscores the toll that trade frictions and changing consumer patterns are taking on logistics employment.
Health Care: Slight contraction of –2.2% YOY (409,800 jobs). Despite chronic demand for healthcare services, employment is marginally below last year – potentially due to workforce burnout, retirements, or hiring lags in hospitals and clinics. The province has announced new measures to train and recruit healthcare workers (e.g. accelerating nursing programs) to address this gap.
Overall, Toronto’s job growth is concentrated in services – especially hospitality, finance, education, and creative fields – while goods-producing sectors and those sensitive to trade or interest rates (manufacturing, construction, transportation) are seeing flat or negative growth. This divergence highlights the uneven nature of the recovery. Sectors tied to local consumption and government spending are doing relatively well, whereas those exposed to global trade and higher borrowing costs remain under pressure.
JobsTO Hiring Activity – Slowdown After April Uptick
After a brief spring uptick, hiring activity on the TWIG’s JobsTO platform pulled back in May. Employers grew more cautious, resulting in declines in both job postings and companies hiring compared to the previous month and especially versus last year’s levels:
Job postings plunged year-over-year. Active job postings in Toronto totaled just 21,328 in May 2025, down 52.7% from about 45,149 a year earlier. This means barely half as many job openings were advertised as in May 2024 – a stark indicator of weakened hiring demand across the city. The number of companies hiring saw a similar drop, roughly half the count of last year, as many employers either froze or scaled back recruitment amid economic uncertainty.
Month-over-month softness. May’s posting count was also lower than April’s (~25,974), reversing the modest gains seen in early spring. From April to May, active postings fell by about –18%, and the tally of hiring companies dipped slightly. This suggests April’s mild rebound was short-lived; by May, employers became more guarded, possibly due to renewed trade war concerns and signs of slower growth. Cautious optimism in March/April gave way to a more guarded hiring approach in May.
Job Postings by Industry
Year-over-year declines persisted across virtually all sectors in Toronto’s online job postings, underscoring broad-based hiring cutbacks.
Transportation: postings collapsed by –74.6% (from 1,200 in May 2024 to just 305 this May). This steep drop reflects the downturn in logistics and travel-related hiring; trucking, transit, and airline job ads have dried up amid economic and trade uncertainty.
Construction and Utilities: –58.6% fewer postings compared to a year ago, mirroring the construction sector’s slowdown (421 postings vs 1,526 last year). Fewer new projects and a cautious real estate environment have sharply reduced the demand for construction labor via job boards.
Manufacturing: postings down –55.8% year-over-year (601 vs 1,360). Factories have pulled back on hiring plans, consistent with the flat employment numbers and tariff-related headwinds hitting the sector.
Retail and Wholesale Trade: –51.2% decline in postings (2,866 vs 5,874). Consumer-facing businesses have scaled down hiring from last year’s levels as spending moderates.
Creative Industries (Arts, Entertainment, Media): –63.5% fewer postings. This large drop suggests that many arts and culture organizations, which had ramped up staffing last year post-lockdowns, are now slowing their hiring – possibly having filled key roles or facing budget constraints.
Finance: postings fell by about –49.8% (4,004 vs 7,975). Toronto’s banks and financial firms have nearly halved their job ads from a year ago, a sign of caution in the finance sector (despite still healthy employment levels). Similarly, Professional Science & Technical postings declined –57.4% (2,637 vs 6,195), indicating fewer opportunities in tech and consulting fields compared to last spring’s hiring push.
Business Services (Admin, Support, Waste Management): –50.4% year-over-year drop in postings (2,340 vs 4,722). This aligns with the sector’s recent employment dip – many support firms have reduced recruitment as their clients cut back.
Education and Public Administration: –48.4% fewer postings than a year ago (1,399 vs 2,713). Governments and schools advertised fewer roles this May, perhaps because many vacancies were filled earlier or due to budget timing.
Health Care: postings down –45.7% (3,138 vs 5,776). Despite healthcare staffing shortages, job ads have fallen, possibly indicating hiring has shifted to other channels or a lag as funding catches up.
Hospitality and Tourism: –50.6% drop in postings (1,388 vs 2,812). This sector had shown signs of stabilizing in early 2025, but remains roughly half last year’s volume of ads – many restaurants and hotels are no longer in expansion mode, having staffed up last summer.
Even the “less affected” sectors are down nearly 45–50% in job postings. For instance, Finance and Health Care, which were comparatively resilient, each saw roughly half the postings of last May. These across-the-board declines illustrate the cautious stance of employers: amid trade tensions, higher costs, and an uncertain economic outlook, companies are posting far fewer new jobs than a year ago. The only silver lining is that the situation had been even worse over the winter; early spring saw a slight pickup. But as of May, hiring appetite remains subdued in most industries. This could temper employment growth in the coming months if conditions don’t improve.
In Other News
Housing Market: Supply Up and Prices Edging Down. Toronto’s housing market in May 2025 became more favorable for buyers, as higher listings met lukewarm demand. Home sales across the Greater Toronto Area (GTA) totaled 6,244 units, a –13.3% drop compared to May 2024. However, new listings jumped 14% year-over-year – over 21,800 homes were listed, a seasonal high. This surge in supply, combined with hesitant buyers, created an unprecedented imbalance. The average selling price for all home types slipped to $1,120,879, about 4% lower than a year ago. Notably, condo sales were hit hardest (sales down ~25% YOY), putting downward pressure on condo prices. In the City of Toronto, pockets of resilience emerged in the low-rise segment – semi-detached home sales were up 1.5% and townhomes up 3.4% year-over-year in the 416 area, rare bright spots in an otherwise cooling market. Overall, active listings have swollen by over 40% compared to last year, and homes are taking longer to sell. Stalled construction projects, cautious buyers, and dampened confidence have converged into a “perfect storm” of slower sales and slight price declines. Despite slightly lower prices and stable interest rates, many buyers remain on the sidelines. Realtors note that borrowing costs (while steady for now) and broader economic uncertainty are restraining buyer enthusiasm. The hope is that improved macroeconomic stability will restore trust and bring some of those buyers back into the market in the second half of the year. Rental Market: Tenant-Friendly Turn Continues. Toronto’s rental market in May 2025 further eased in favor of renters. Average asking rents have now declined year-over-year for six consecutive months. One-bedroom apartments that once went for premium prices have become more affordable: for example, a downtown one-bedroom now averages about $2,224, down nearly $400 from its late-2023 peak. Overall, city-wide rents are estimated around 6–7% lower than a year ago, a significant turnaround after years of increases. The vacancy rate has climbed to its highest level in recent memory – hovering around 3% (and even higher, 3.5%, for newer purpose-built rentals) – compared to vacancy under 1.5% just a couple years ago. With more inventory on the market and less frantic demand, renters have gained rare negotiating power. Landlords, keen to fill empty units, are offering incentives like free month’s rent, discounted amenities, and other perks that were unheard of during the rental boom. This spring, many tenants seized the opportunity to move into larger or better apartments for similar rent, or to push for lease discounts on renewals. While experts caution that this tenant-friendly window may not last forever (rent activity typically picks up in summer), for now Toronto’s rental landscape is markedly more affordable and flexible. The shift is driven by higher supply (more condos and rentals hitting the market), lower demand from some groups (e.g. fewer international students due to study permit rules), and some young renters moving back home or doubling up to cut costs.
Major Retail Closure: Hudson’s Bay Shutters, 8,000+ Jobs Lost. An era of Canadian retail has come to an end: Hudson’s Bay Company (HBC) closed all its remaining stores in early June, culminating its court-supervised liquidation. The iconic retailer’s shutdown delivered a heavy blow to the labour market. More than 8,000 employees were terminated by June 1 as the last 80 The Bay and Saks Fifth Avenue locations across Canada ceased operations. This mass layoff represents roughly 89% of HBC’s workforce being eliminated virtually overnight. (A final few hundred staff stayed on briefly to wind down operations through mid-June.) The flagship downtown Toronto Bay store – a landmark employer – saw its doors close after Sim years, with crowds of nostalgic shoppers streaming through in late May. On the positive side, some of HBC’s assets will live on – for instance, Canadian Tire struck a deal to acquire Hudson’s Bay’s trademarks and digital assets, and certain prime store locations may be taken over by new retailers or redeveloped. Nonetheless, the loss of 8,000+ retail jobs virtually at once is one of the Toronto region’s largest mass layoffs in recent memory, and a sobering reminder of how shifting consumer trends can upend longstanding employers
Building Skills for the Future.
Amid these challenges, there is positive news on the workforce development front. In June, Toronto Pearson International Airport awarded $1.57 million through its Uplift Fund to 11 local organizations to boost training and job access in surrounding communities. This investment will provide over 2,000 residents in areas like Mississauga, Brampton, and Etobicoke with skilled trades training, job placements, and career coaching opportunities
Health Care Initaitve
The Ontario government announced new funding in early June to expand nursing and health-care training programs by adding seats and accelerating qualification times. This $4.2 million initiative aims to address the nursing shortage by fast-tracking more graduates into the field. Both efforts illustrate a strategic push to align Toronto’s workforce with areas of high demand. By investing in skills and training now, local leaders hope to mitigate labour shortages in construction and health care, even as other parts of the job market cool. These initiatives are a reminder that, despite short-term uncertainties, planning for long-term workforce resilience remains a priority. With the right training and support, workers affected by economic shifts – from retail employees to new graduates – can be equipped to fill the jobs of tomorrow in Toronto’s evolving economy.
