The Canadian economy shed 33,000 jobs in March according to Statistics Canada — the biggest loss since January 2022, while the unemployment rate ticked slightly higher, Statistics Canada said on Friday.
The agency said the unemployment rate also ticked slightly higher, rising to 6.7 per cent in March from 6.6 per cent in February.
The overall decrease also came as 62,000 full-time jobs were lost in the month, partly offset by a gain in part-time employment.
The hit came amid increased uncertainty caused by U.S. tariffs that have threatened economic growth.
The latest data also shows a reversal of some of the job growth that came at the end of last year and into January. While February posted fairly stagnant jobs numbers, January saw 76,000 new jobs created and December had 91,000.
TD Bank senior economist James Orlando said the impact of trade tariffs appears to be working its way through the economy.
“Businesses and consumers are naturally hesitant in the face of heightened political uncertainty,” Orlando wrote in a note. “Today’s report reflects this, with full-time jobs in the cyclically sensitive private sector driving the losses.”
Doug Porter, chief economist at BMO, said trade uncertainty was expected to have a chilling effect, but adds that the trade war isn’t all to blame.
“The weakness was fairly broad-based that wasn’t just in the sectors that would be directly related to trade,” he said. “But this is [one of] the weakest reports we have seen in a number of years.”
He says the economic situation since Wednesday increases the odds the Bank of Canada will cut interest rates in mid- April. The Bank of Canada cut its lending rate to 2.75 per cent last month.
The wholesale and retail trade sector lost 29,000 jobs in March, following an increase of 51,000 in February.
The information, culture and recreation sector lost 20,000 jobs, while the agriculture sector lost 9,300.
Meanwhile, the “other services” sector, which includes personal and repair services, added 12,000 jobs. Utilities added 4,200.
Total hours worked were up 0.4 per cent in March, following a drop of 1.3 per cent in February. Average hourly wages among employees also rose 3.6 per cent on a year-over-year basis in March.
On the south side of the border, where the U.S. Labor Department also released job numbers today, the picture was quite different.
Non-farm payrolls in the U.S. increased by 228,000 jobs last month, following a revised 117,000 increase in February, the department said in its closely watched employment report on Friday.
Economists polled by Reuters had forecasted a smaller increase of 135,000 jobs, after a previously reported 151,000 rise in February.
The unemployment rate rose to 4.2 per cent from 4.1 per cent in February. The labour market is being underpinned by low layoffs, generating solid wage gains that are helping to sustain the economic expansion.
But businesses there have been hesitant to hire because of the U.S.’s uncertain trade policy. That caution could give way to job cuts after Trump unveiled sweeping tariffs on Wednesday.
People on Wall Street react to Trump’s tariffs
Trump’s tariffs blitz since returning to the White House has already unnerved businesses, many of which had cheered his electoral victory in November. The report could offer some short-term relief to financial markets roiled by the import duties.
Data and sentiment surveys have suggested the economy stalled in the first quarter because of trade policy uncertainty and winter storms. Economists are also not ruling out a recession in the next 12 months.
