Canada unexpectedly shed 83,900 jobs in February, pushing the unemployment rate to 6.7%. This was the biggest drop in 17 years (outside of the pandemic), shattering analysts’ expectations of modest growth in the labour market.
The impact of Trump’s tariffs on the steel, auto and lumber sectors has been the main cause of the economic slowdown. The job losses were across the board, with 108,400 full-time positions lost, mainly in the private sector, which has been forced to downsize.
While hiring has slowed, wage growth has surged to 4.2%, its highest level in 16 months. This has complicated the Bank of Canada’s task of keeping inflation in check, as wage pressures remain high despite a drastic contraction in the labour market.
A string of negative trends in January and February saw 109,000 jobs lost this year. Economists warn that corporate investment uncertainty will continue to weigh on the Canadian labor market as long as trade relations with the US remain tense.
