Canada Posts Unexpected 83,900 Job Losses in February as Unemployment Ticks Higher
Canada’s economy unexpectedly lost a net of 83,900 jobs in February, while the unemployment rate rose to 6.7 per cent as jobs losses occurred across both services and goods sector, Statistics Canada data showed on Friday.
A dip in the number of jobs this high was last observed almost 17 years ago if the months of lockdown during the pandemic are excluded, Statscan said.
The result missed analysts’ expectations of a job gain of 10,000 and an unemployment rate of 6.6 per cent. In the previous month, the economy lost 24,800 jobs and the jobless rate was down to a 16-month low of 6.5 per cent.
Canada’s labor market has failed to add any substantial jobs in the last few months as economic growth sputtered owing to a range of tariffs from U.S. President Donald Trump across critical sectors such as steel, autos, lumber and copper.
With the jobs losses of January and February, the economy has shed a total of 109,000 jobs, coming close to offsetting the massive gains of 189,000 jobs seen between September and December.
While the knock-on effects from these sectors have largely been contained, the Bank of Canada and economists have warned of more job losses as companies hold back investments and announce layoffs.
Employment amongst youth, which is usually always weaker than the core-aged people between 25 and 54 years, dipped to 14.1 per cent in February, close to the highest level seen in September last year, Statscan said.
In February, even the core-aged group witnessed a decline in employment by 37,000 people, highest since January, 2022.
The drop in the number of jobs was wholly led by 108,400 jobs drop among full-time workers in February and led by a 72,600 jobs in the private sector. Government jobs also declined by 17,100 last month.
In a blow to BoC’s efforts to keep inflation low, the average hourly wages of permanent employees – a gauge closely tracked by Canada to determine inflationary trends – rose by nine percentage points to 4.2 per cent, highest since October, 2024.
The goods-producing sector, which comprises some of the top sub-sectors highly exposed to the U.S. tariffs, lost 27,900 jobs, while the usually resilient services sector posted a bigger decline of 56,200 jobs, Statscan said.
This article was first reported by Reuters
