Canada April Employment - Weak data suggests little case for tightening
Canada’s April employment report with a 6-month high of 6.9% for unemployment following two straight months at 6.7%, and a fall of 17.7k in employment, is clearly a weak one and suggests there is little case for the Bank of Canada to consider tightening as long as core inflation shows no clear feed through from strength in energy.
This is the third employment decline in four months and with March’s 14.1k increase having followed a plunge of 83.9k in February we are now seeing a negative trend, though a run of three straight strong months from September through November in 2025 shows that Canadian employment data should be interpreted cautiously.
Detail is on mostly weak, with full time work down by 46.7k only partially offset by a 29k rise in part time work. Public sector employment at -9.5k did however explain over half the job loss. Private sector work fell by only 2.6k with self-employment down by 5.7k. The job loss was more than fully explained by a 26.8k decline in goods, led by a 15.7k fall in construction. Manufacturing at -1.5k was reasonably resilient. Services rose by 9.1k. Within the services breakdown information, culture and recreation at -24.8k was the weakest sector and business, building and other support with a 21.5k rise the strongest.
The unemployment rate was lifted by a 33.5k rise in the labor force that looks corrective as well as the drop in employment. Wage growth, as measured by the hourly rate for permanent employees, slowed to 4.8% yr/yr from 5.1%, but remains quite firm, and well above 4.2% in February. March’s bounce was lifted by softer year ago data. April 2025 did not see a strong correction higher, keeping yr/yr data firm.
