By Robb M. Stewart
OTTAWA--Canada saw a muted recovery in hiring last month, though with an equally modest expansion in the country's labor force the jobless rate was essentially unchanged.
Employers in the country added 14,100 jobs in March, holding the unemployment rate at 6.7%, the national data agency said Friday.
The steadying of the job market comes after nearly 109,000 jobs were lost in the first two months of 2026, and leaves the unemployment rate just below the 6.8% where it ended last year and the recent peak of 7.1% in September, but still above January's 6.5%.
After more volatility than usual in the employment indicator in recent months, March's result was largely in line with what economists were expecting. And aside from an acceleration in wage pressures, the details of the jobs report stabilized. For central bank watchers, it suggests Bank of Canada policymakers are still likely to remain on the sidelines at the late-April meeting.
"For a refreshing change, the employment results were no big surprise in March. And the big-picture take-away is that job growth has been quite modest over the past year, but so too has been the growth in the available labor force, holding the unemployment rate steady," said Douglas Porter, chief economist at Bank of Montreal Capital Markets.
Softness in the labor market comes against a backdrop of heightened uncertainty for Canadian employers and restrained hiring intentions, as the recent oil-price shock compounds concerns about trade policy and U.S. tariffs. Slowing population growth after the federal government tightened immigration settings have also squeezed the job market.
There was an increase of just over 15,000 in the number of part-time jobs for the month, countering a 1,100 dip in full-time positions. Of the jobs that were created in March, most were in a basket of roles that includes personal and repair services, as well as in the natural resources sector, while employment dropped slightly in insurance and real estate.
"In previous periods, March's net-employment growth of 14,000 would be fairly underwhelming. However, now that Canada is on the other side of its post-pandemic immigration boom, flat readings will be the norm in the near term," said Brendon Bernard, senior economist at jobs site Indeed.
The end of once-booming immigration is expected to constrain employment growth, but also will mean overall job gains won't need to be strong to hold the unemployment rate in check, Bernard said.
Canada's population contracted for the first time on record last year. Statistics Canada's job numbers showed the population increased by a thin 11,200 in March, the most in four months but well below the pace in recent years. The labor force increased by 15,100 for the month but is down roughly 39,000 over the last six months, while the rate of participation in the job market was steady in March after slipping the previous two months when severe winter weather may have deterred job seekers.
Where there was movement was in pay. Wage growth accelerated again last month, and continues to outpace annual consumer price inflation, which has hovered around the central bank's 2% target for about two years.
Average hourly wages were up 4.7% from the same month last year, the strongest advance since October 2024, and after annual growth in average wages had hovered between 3.2% and 3.9% from about a year through February. While that may be troubling for Bank of Canada officials watchful for broader inflationary pressures after oil prices spiked, Statistics Canada notes the wage increases in part reflected the composition of employment and smoothing for that would have been relatively steady at 3.6%.
Michael Davenport, senior economist at Oxford Economics, expects a few more months of modest job losses in Canada due to headwinds from tariffs, trade policy uncertainty and the Middle East conflict, but for the unemployment rate to not move much higher.
"A shrinking population will soon turn breakeven employment growth negative, meaning the economy won't have to create any jobs for the unemployment rate to fall," he said.
Write to Robb M. Stewart robb.stewart@wsj.com
(END) Dow Jones Newswires
04-10-26 1215ET
