The Canadian economy added 27,700 jobs in May, enough to push the jobless rate down to 5.4 per cent — its lowest level since 1976.

Statistics Canada reported Friday the jobless rate dropped three ticks mainly because there were almost 50,000 fewer people looking for work. That, coupled with the jobs gain, was enough to push the rate to a more than 40-year low.

May's job gain comes on the heels of 106,500 added in April, the best month for jobs on record.

The May number means Canada's economy has added 453,000 jobs in the past 12 months — an increase of 2.4 per cent, and the best 12-month stretch since 2003. It also surpassed the roughly 5,000 jobs that economists polled by Bloomberg were expecting for the month.

Most of the jobs were added in Ontario, British Columbia, Nova Scotia and New Brunswick. The job market shrank, meanwhile, in Newfoundland and Labrador, and Prince Edward Island. Everywhere else, it was little changed.

Canada's unemployment rate has fallen to its lowest level on record. (Scott Galley/CBC)

The numbers also seem to suggest the market for summer jobs for young people is doing well. Statistics Canada calculated that employment among 20- to 24-year-old students grew by 32,000 in May compared to the same month last year.

Even younger workers (between ages 17 and 19) saw an increase of 35,000 new jobs compared to last year.

Virtually all of the new jobs came in the form of self-employment. Some 62,000 people identifying as self-employed got jobs during the month, but they were offset by a loss of 33,800 employees elsewhere.

Economists tend to think that self-employment isn't the best type of employment because it tends to be temporary, and often isn't as stable or well-paying in the aggregate.

While the drop in the jobless rate sounds impressive, economist Brian DePratto of TD Bank noted that on the whole the report wasn't all that strong, especially that surge in self-employment.

Canada's job market followed up its best month ever in April with a solid May. (Scott Galley/CBC)

"Meh. Looking past the new record low in the unemployment rate, this report was a bit on the soft side," he said. "All of the job gains (and then some) are down to self-employment, and the drop in the unemployment rate was driven by fewer Canadians engaging with labour markets, notably among the under-55 population," he said.

"The only real bright spot was wages," he added, noting that wage gains for permanent employees came in at a healthy gain of 2.6 per cent for the year.

"It looks like most of the economy is performing well as payrolls expand, as it can withstand some headwinds in particular industries," said Arlene Kish, the director of Canadian economics at IHS Markit.

"This overall positive outcome supports a stronger ... outlook for the rest of the year," she said.