Canada’s unemployment rate reaches six-month high as full-time jobs decline

Friday 08 May 2026 - 13:00

Canada’s labor market showed renewed signs of weakness in April as the national unemployment rate climbed to its highest level in six months. The latest figures point to growing pressure on the economy amid trade tensions, slowing business confidence, and global economic uncertainty.

According to official data released Friday, the unemployment rate increased to 6.9%, while the economy recorded a net loss of approximately 17,700 jobs during the month. Economists had expected moderate employment growth and a smaller increase in unemployment, making the figures a disappointing signal for policymakers and investors alike.

The decline was largely concentrated in full-time employment, which experienced a significant drop. Although part-time hiring increased, it was not enough to compensate for the losses in permanent positions. Analysts say this trend may reflect caution among employers facing uncertain economic conditions.

Despite the weaker labor market, average hourly wages for permanent employees continued to rise, posting annual growth of 4.8%. The increase suggests that wage pressures remain present even as hiring slows, creating a complex environment for the central bank.

The participation rate remained at 65%, reflecting demographic changes and an aging population. Labor experts note that workforce participation has become an important indicator of the country’s long-term economic resilience.

Economic uncertainty has intensified over the past year due to international trade tensions and concerns surrounding tariffs imposed by the United States. Rising global prices linked to geopolitical conflicts have also added pressure on businesses and households.

The Bank of Canada previously indicated that labor market indicators, including hours worked and job vacancies, pointed to underused economic capacity. However, layoffs have remained relatively limited so far.

Financial analysts believe future employment trends will depend heavily on inflation levels, trade negotiations, and consumer spending in the coming months. Many businesses continue to adopt a cautious approach while awaiting clearer economic signals.