Statistics Canada released the labour market data on Friday. Canada's unemployment rate declined to 6.9% in May from 7.1% in April. Analysts had expected the unemployment rate to remain unchanged at 7.1%.

The labour participation rate declined to 65.7% in May from 65.8% in April.

The Bank of Canada monitors closely the labour participation rate.

The number of employed people rose by 13,800 jobs in May, exceeding expectations for a gain of 3,800 jobs, after a 2,100 drop in April.

The decrease was mainly driven by a fall in full-time work. Full-time employment climbed by 60,500 in May, while part-time employment slid by 46,800 jobs.

Employment rose in the "other services" industry, public administration, construction, business, building and other support services, educational services, and manufacturing.