canada’s labouring job market
May 13, 2025
Written by
Ryan WyseSHARE THIS
At first blush, the latest Labour Force Survey (LFS) data release from Statistics Canada portrayed a relatively steady (if not stagnant) picture of employment last month. The total number of jobs in Canada grew ever so slightly between March and April (by 7,400), while the unemployment rate rose to 6.9%, up from 6.7% the previous month.
Beneath the surface, however, a less-rosy narrative emerges. It turns out that a significant number of the net new jobs came from a rather specific corner of the labour market: public administration. Much of this was from the recent federal election as Elections Canada hired a substantial number of election workers. These positions are temporary in nature, and without the election, total employment would have likely declined last month, by a substantial amount. The change in temporary employment data is not seasonally-adjusted like the other metrics, however the increase in temporary public administration employment was 19,100 last month, which was the highest March-to-April increase over the past 25 years (the average change was just 189 over that period).
Other areas of the labour market saw some noteworthy job losses in April, particularly in manufacturing and in wholesale & retail trade. Each of these sectors is susceptible to US tariffs on our exports, as well as to the broader air of uncertainty around global trade, which is leading to reduced business and consumer confidence. That, in turn, is leading to less investment from businesses and a pull-back in hiring.
With the next few months expected to be characterized by more muted economic activity, the 7,400 additional jobs that Canada banked between March and April looks to be a one-off, with the Canadian labour market likely to soften further in May. While the Bank of Canada has repeatedly stated that “monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war. What it can and must do is maintain price stability for Canadians”, a softening labour market is a symptom of weak demand. This increases the likelihood of a cut to the Bank of Canada’s policy rate at its next announcement on June 4th.
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