The Canadian labour market felt a chill in February with employment “virtually unchanged” from the month before, Statistics Canada said Friday.
The Canadian economy added just 1,100 jobs last month, the agency said, well below the 76,000 jobs added in January.
Economists polled by Reuters ahead of Friday had expected an increase of 20,000 new positions for the month.
February’s modest gains were enough to keep the unemployment rate steady at 6.6 per cent as the Canadian population grew at its slowest monthly pace since April 2022.
StatCan’s estimates show the Canadian population grew by 47,000 people aged 15 or older in February, less than half the number seen in the same month a year ago.
Brendon Bernard, senior economist at job site Indeed, said in an interview that stability in the unemployment rate is a clear sign that Canadian employers were not turning to layoffs en masse ahead of looming tariffs from the United States.
“There's potential trouble ahead for the job market, but that's not what we saw in February," Bernard said.
The agency’s figures show a loss of 19,700 full-time roles in February, offset by a gain of 20,800 part-time jobs.
Job growth last month was led by the wholesale and retail trade sectors and the finance, insurance, real estate, rental and leasing industries.
Those gains were offset by losses in professional, scientific and technical services and transportation and warehousing.
Canada’s manufacturing industry, which led job gains in January, contracted by 4,800 positions in February. Ontario was an outlier from the losses, adding another 10,800 manufacturing jobs in the month and nearly matching January's gains.
Bernard said the manufacturing industry is one of the key barometers for anticipated impacts from tariffs on Canada's economy.
While the data to date does not show the sector bleeding jobs, Bernard said listings for manufacturing and production jobs on Indeed fell seven per cent in February, suggesting a slowdown in hiring ahead.
“The clouds are still, I think, on the horizon, rather than the storm raging today," he said.
StatCan said all provinces saw employment hold steady in February except Nova Scotia, which shed 4,200 part-time positions.
Average hourly wages accelerated slightly to 3.8 per cent year-over-year in February from 3.5 per cent in January, StatCan said.
A series of major snowstorms in Central and Eastern Canada last month meant 429,000 Canadians lost hours of work, the agency said, more than four times the five-year average for the figure in February. Total hours worked dropped 1.3 per cent last month, the largest monthly decline since April 2022.
February’s employment figures reflect an economy bracing for the impact of possible tariffs from the United States, which went into effect on March 4 and have since faced a series of revisions and retaliatory actions from Canada.
TD Bank director of economics James Orlando said in a note to clients Friday that the harsh winter weather was the "likely culprit" for Canada's weak labour market results in February, but he added that fears of the impending tariffs may have also started to bleed into the data.
"Luckily, the Canadian labour market came into the current tariff crisis on solid footing, which is important given the significant headwinds the economy is facing," he said.
Friday’s jobs report is the last major data release the Bank of Canada will see before its next interest rate decision on March 12.
CIBC senior economist Andrew Grantham said in a note that February's hiring stall, combined with a looming hit to the economy from the trade war, should tip the Bank of Canada toward another 25-basis-point cut next week.
