Canadian Employment (April 2025)

Canadian employment little changed in April

• The Canadian labour market basically tread water in April, adding only 7k net new positions (+0.0% month/month). The modest gain was driven by public sector hiring (23k) and self-employment (11k), while the private sector shed jobs (-27k). Cut another way, solid gains were seen in full-time jobs (32k), which were partly offset by losses in part-time jobs (-24k). 
• As a result, the unemployment rate rose two tenths to 6.9% in April as Canada's labour force expanded by 47k workers (+0.2% m/m). Growth in the labour supply was mostly due to population growth and a slight rebound in labour force participation (65.3%). 
• Modest hiring in April was boosted by the federal election, which contributed to 37k gain in public administration jobs. Trade-exposed sectors lost jobs. The manufacturing sector was down (-31k or -1.6% m/m), as was the wholesale and retail trade sector (-27k or -0.9% m/m). Ontario alone lost 33k manufacturing jobs. 
• Lastly, total hours worked made a solid 0.4% m/m gain, continuing to recover from weather-induced drop in February. Meanwhile wage growth continued to slow. Average hourly wages rose 3.4% versus a year ago, down from 3.6% year-on-year in March.                

Key Implications

• Canada's economy added jobs in April largely thanks to temporary work for the federal election, but scratch beneath the surface and Canada's labour market continued to soften. The impact of trade tariffs appears to be working their way through the economy with job losses in trade exposed sectors. Month-to-month job numbers in the labour force survey are always a bit volatile, but on a three-month average basis Canada has lost jobs. The unemployment rate continues to drift higher, and wage gains are cooling.
• In April, the Bank of Canada opted to wait and see how tariffs and Canada's response shake out before lowering interest rates any further. The economic evidence continues to mount that the Canadian economy is slowing in the face of U.S. tariffs. We think more interest rate cuts are warranted, with the next 25 basis point cut on June 4th. 

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