OTTAWA (Reuters) – Canada’s unemployment in February was unchanged from the prior month and new job additions was only marginally up, data showed on Friday, showing early signs of an impact of uncertainty around U.S. tariffs on hiring decisions of companies.
The unemployment rate for February was at 6.6% and the economy added a net of 1,100 jobs, Statistics Canada said.
This is in sharp contrast to job additions of 76,000 seen last month and a cumulative jobs addition of 211,000 people seen in the last three month, Statscan said.
Analysts polled by Reuters had estimated the unemployment rate at 6.7% and net additions of 20,000 jobs in February.
This is the final major data to be released before the Bank of Canada’s monetary policy decision on March 12. Currency swap markets are betting that there is close to 73% chance that the bank would cut interest rates the seventh time in a row to 2.75%.
Canada’s joblessness level has been improving since late last year after a peak of 6.9% seen in November as interest rates came down, inflation came within the Bank of Canada’s 1% to 3% target range and the economic activity picked up.
However, an uncertainty around tariffs has taken a toll on the hiring intentions of companies, Statscan’s data shows, and economists say unemployment could worsen if the tariffs are imposed.
U.S. President Donald Trump reversed his decision to slap a 25% tariff on almost all Canadian imports for a month for the products which fall under the USMCA free trade agreement.
The employment rate, or the number of people employed out of the total population, was unchanged at 61.1. This metric has been improving in the last few months even as population growth ate has been slowing, showing improving job market.
Growth in the working age population, that is those aged 15 and older, has slowed in recent months as Prime Minister Justin Trudeau’s government implemented immigration curbs under pressure to ameliorate the affordability crisis
Population growth in February was 47,000, up 0.1%, which was less than half that recorded twelve months earlier and slowest since April 2022.
The labor force or the total number of people employed and unemployed shrunk by 16,800, highest such drop since June 2022.
The participation rate — the proportion of the population who were employed or looking for work — decreased to 65.3% in February, the first decrease since September 2024, the statistics agency said.
The average hourly wage growth of permanent employees rose to an annual rate of 4.0% in February from 3.7% in January, the Statscan said.
The wage growth figure is closely watched by the BoC and, along with rental prices, has been one of the most resilient items which has refused to cool in tandem with easing inflation.
(Reporting by Promit Mukherjee; Editing by Dale Smith)
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