The rebound in Canada's employment growth screeched to a halt last month, rising by an anemic 1,100 (so pretty much unchanged) in February from January, nowhere near the expectations in Econoday's survey of forecasters for a 15,000 gain. The unemployment rate was unchanged at 6.6 percent in February from January. Forecasters looked for unemployment to rise to 6.7 percent in February.

The weak jobs data, combined with the onset of a trade war between Canada and the United States (notwithstanding the temporary pause in punitive tariffs), will likely prompt another rate but by the Bank of Canada at its monetary policy meeting next week.

February's flat employment reading follows three consecutive monthly increases totalling 211,000 (+1 percent) in November, December and January. Compared to a year ago, employment is up by 387,000 (+1.9 percent) in February.

The participation rate was 65.3 percent in February, vs. 65.5 percent in January and 65.4 percent in December. The participation rate is down 0.3 percentage points compared to a year ago.

Total hours worked fell 1.3 percent in February (the biggest drop since April 2022), but are up 0.5 percent from a year ago. Average hourly wages are up 3.8 percent year-over-year after the annual growth rate was +3.5 percent in January, and up 4 percent in December.

For January, employment gains were led by wholesale and retail trade (+51,000; +1.7 percent) and finance, insurance, real estate, rental and leasing (+16,000; +1.1 percent).

Private sector jobs rose by 10,200 in February after an increase of 57,000 in January and a 39,000 rise in December. Public sector employment increased by 7,600 following January's contraction by 8,400, and +40,400 in December. Self-employment declined by 16,800, after growing by 27,000 in January.

The consensus looks for a marginal 15,000 rise in employment and an uptick to 6.7 percent in the jobless rate from 6.6 percent a month ago.

The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.

As in the U.S., this report is used as an indicator of the health of the domestic economy. Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.

The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.

The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.

The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.