At the moment’s newest figures from Statistics Canada come amid ongoing commerce tensions and heightened uncertainty, setting the stage for the Bank of Canada’s anticipated 25 foundation level price lower subsequent week.

Employment in Canada remained practically unchanged in February, including only one,100 jobs, a far cry from the numerous will increase seen within the earlier two months. In the meantime, the unemployment price held regular 6.6%.

The end result got here as a shock to some economists, who famous that the massive employment spikes in December (+91k) and January (+76k) ‘favoured one other acquire’ based mostly on historic traits, based on Scotiabank’s Derek Holt.

RBC economists had predicted a average enhance of 15,000 web new jobs.

The labour power participation price, which tracks the proportion of Canadians 15 and up who’re working or searching for work, fell 0.2% in February for the primary time since September 2024.

In response to the information, the Canadian greenback slipped 0.4% to 0.697 earlier than regaining some floor, whereas the Authorities of Canada 5-year bond yield slipped two foundation factors to 2.70% as of the time of writing.

Complete hours labored additionally noticed a notable dip, reducing by 1.3%, the most important drop since April 2022. Statistics Canada attributed a lot of this decline to extreme winter climate, which led to 429,000 employees dropping hours between February 9 and 15.

“The job market couldn’t sustain its feverish tempo over the previous few months,” wrote James Orlando of TD Economics, including that “deteriorating hiring sentiment given heighten coverage/commerce uncertainty could have additionally began to bleed into the information.”

BMO’s Douglas Porter echoed considerations in regards to the influence of the continuing commerce dispute with the U.S., which he believes has begun to have an effect on Canada’s job market. “Wanting via the month-to-month wobbles, it’s moderately clear that the job market had been turning the nook in current months…till the commerce warfare erupted,” he famous.

By way of sector efficiency, wholesale and retail commerce (+51,000) and finance, actual property, rental, and leasing (+16,000) noticed positive aspects, whereas there have been notable losses in skilled, scientific, and technical providers (-16,000) and transportation and warehousing (-23,000).

25 bps price lower anticipated subsequent week as commerce warfare considerations persist

As has been the case since last month, commerce warfare anxieties stay in focus in comparison with labour information, Canadian economists word. 

Porter the “little drama” in at present’s Canadian jobs information, noting that markets will quickly refocus on the continuing commerce warfare considerations. 

TD’s Orlando emphasizes the significance of watching Canada’s labour marketplace for ‘indicators of weak point’ within the coming months, however notes that the job market, “got here into the present tariff disaster on strong footing, which is essential given the numerous headwinds the financial system is going through.” 

Orlando is hopeful that the Financial institution of Canada will lower charges subsequent week by 25 bps as markets are at present pricing in. 

Within the U.S., the scenario shifted this morning with 151,000 jobs added final month, though unemployment rose barely to 4.1%.

TD Economics’ Thomas Feltmate notes that hiring exercise has been constructive during the last quarter, however is anticipated to melt on account of layoffs by the Division of Authorities Effectivity (DOGE) and ongoing commerce coverage uncertainty. 

That stated, Feltmate’s analysis factors to 3 25bps cuts by the Fed in 2025. 

“Monetary markets have develop into more and more involved about slowing development prospects in current weeks, with Fed futures now totally pricing for 3 25bps price cuts by year-end,” he stated. “Nevertheless, the Fed is unlikely to be swayed by the current market volatility, notably amid a nonetheless wholesome labour market and potential coverage adjustments that would additional add to nonetheless elevated inflationary pressures.”

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Final modified: March 7, 2025