Canada's labour market showed only tentative signs of improvement in March, with employment rising by a net 14,100 jobs and the national unemployment rate holding steady at 6.7% from February, Statistics Canada reported.
While this marked the first monthly increase in job numbers so far this year, the rise was modest and insufficient to fully counter the substantial losses recorded earlier in 2024. Total job losses in January and February combined amounted to 109,000, and the March gain of 14,100 only partially offset that decline.
Economists surveyed by Reuters had been anticipating employment to expand by about 15,000 in March and had expected the unemployment rate to tick up to 6.8%. Instead, unemployment remained unchanged, and other measures of labour market utilisation showed continuing slack.
Composition of March job changes
The entire increase in March was driven by part-time positions, which rose by 15,200. Full-time employment slipped by 1,100, a combination that highlights underemployment even as headline employment rose. The unemployment rate among the core-aged population (25-54 years) and among youth also remained the same in March as in February, according to the data.
Sectoral breakdowns showed the goods-producing sector—one of the areas most exposed to recent U.S. tariffs—adding 12,500 jobs. The services sector, which employs roughly four in five Canadians, recorded a smaller increase of 1,700 positions. These patterns point to uneven hiring across the economy.
Wages and broader economic context
Average hourly wages for permanent employees rose 5.1% year-on-year in March, the strongest annual pace in 20 months. Wage growth at this level is a closely monitored indicator for policy makers and market participants tracking inflationary pressure and household income dynamics.
Statistics Canada noted that Canada’s economic momentum has softened over the past year amid a series of U.S. tariffs affecting sectors including steel, aluminum, autos, copper and lumber. The economy has so far avoided an official recession, but the tariffs have contributed to layoffs in trade-exposed industries and muted hiring in other parts of the labour market.
Additional headwinds identified in the data include inflationary effects tied to the conflict in the Middle East and uncertainty related to a review of a free trade agreement with the United States. These factors were cited as weighing on hiring and on broader economic confidence.
Policy relevance
Policymakers at the Bank of Canada closely monitor indicators such as full-time employment levels and the unemployment rate when considering monetary policy. The combination of a high unemployment rate, weaker full-time employment and still-elevated wage growth creates a mixed signal for assessing economic slack and inflationary pressures.
Overall, the March report paints a picture of a labour market with lingering underutilized capacity, uneven sectoral performance and persistent external and domestic uncertainties influencing hiring decisions.