Canadian Employment (April 2026)

Canada's unemployment rate rises as more people look for work 

• Canada’s economy lost 18k jobs in April (-0.1% m/m), undershooting consensus expectations for a 10k gain. Employment is now virtually unchanged following February’s sharp decline. Full‑time employment fell by 47k, while the number of private‑sector workers was essentially flat (-2.6k).
• The unemployment rate rose to 6.9% from 6.7%, as labour supply increased faster than job creation. The number of people in the labour force grew by 33.5k, pushing the labour force participation rate up 0.1 percentage point to 65.0%. The monthly layoff rate (0.6%) remained in-line with the pre-pandemic average.
• Job losses were concentrated in services-producing industries, led by information, culture and recreation (-25k), construction (-16k), and other services (-13k). These declines were partially offset by gains in business, building and other support services (+22k), health care and social assistance (+18k), and accommodation and food services (+13k).
• Average hourly wages were up 4.5% year-on-year (y/y) down from 4.7% in March. Importantly, the elevated wage gain reflects compositional shifts, with fewer employees with shorter job tenures.                

Key Implications

• A modest drop in employment coupled with a sizeable jump in the labour force drove up the unemployment rate two ticks this month. Although the monthly data reflect a high degree of variability, the persistently elevated unemployment rate is reflective of a job market that continues to struggle to absorb labour supply. In the coming months we expect the labour force increases to lose steam and help cap further rises in the unemployment rate. 
• The economic outlook is far from rosy and the ongoing slack in the labour market is reflective of an economy that is still struggling to gain traction. However, with the labour market still soft, the ability of firms to pass on cost increases from the inflation shock to consumers is more limited. This is a key factor that underpins our view that if the sharp rise in oil prices begins to reverse in the coming weeks, the Bank of Canada will be able to stay on hold this year.

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