The Canadian labour market experienced minimal change in February, with employment figures remaining virtually unchanged from the previous month, according to Statistics Canada. The Canadian economy added a mere 1,100 jobs in February, a significant drop from the 76,000 jobs added in January.
Economists had anticipated an increase of 20,000 new positions for February, but the modest gains were sufficient to keep the unemployment rate steady at 6.6%. This stability comes as the Canadian population grew at its slowest monthly pace since April 2022, with an increase of 47,000 people aged 15 or older.
Brendon Bernard, a senior economist at job site Indeed, noted that the steady unemployment rate indicates that Canadian employers are not resorting to mass layoffs despite the looming threat of tariffs from the United States. "There’s potential trouble ahead for the job market, but that’s not what we saw in February," Bernard said.
Statistics Canada reported a loss of 19,700 full-time positions in February, which was offset by a gain of 20,800 part-time jobs. Job growth was primarily driven by the wholesale and retail trade sectors, as well as the finance, insurance, real estate, rental, and leasing industries. However, these gains were counterbalanced by losses in professional, scientific, and technical services, as well as transportation and warehousing.
The manufacturing sector, which had led job gains in January, saw a contraction of 4,800 positions in February. Ontario was an exception, adding 10,800 manufacturing jobs, nearly matching January's gains. Bernard highlighted the manufacturing industry as a key indicator of the potential impact of tariffs on Canada's economy. While the sector has not yet shown significant job losses, listings for manufacturing and production jobs on Indeed fell by 7% in February, suggesting a slowdown in hiring.
Statistics Canada also noted that all provinces, except Nova Scotia, saw employment levels remain steady in February. Nova Scotia experienced a loss of 4,200 part-time positions. Average hourly wages increased slightly to 3.8% year-over-year in February, up from 3.5% in January.
A series of major snowstorms in Central and Eastern Canada resulted in 429,000 Canadians losing hours of work, significantly higher than the five-year average for February. Total hours worked dropped by 1.3%, the largest monthly decline since April 2022.
February's employment figures reflect an economy bracing for the impact of potential tariffs from the United States, which took effect on March 4. TD Bank's director of economics, James Orlando, attributed the weak labour market results to harsh winter weather and concerns over impending tariffs. "Luckily, the Canadian labour market came into the current tariff crisis on solid footing," Orlando said.
The Bank of Canada will consider February's jobs report before its next interest rate decision on March 12. CIBC senior economist Andrew Grantham suggested that the hiring stall and the looming trade war could prompt the Bank of Canada to implement another 25-basis-point cut.