The Canadian economy shed 33,000 jobs in March, after adding an anemic 1,100 in February, nowhere near the expectations in Econoday's survey of forecasters for a 20,000 gain. The unemployment rate rose as expected from 6.6 percent in February to 6.7 percent in March.

Another weak jobs data, combined with the drag from the trade war between Canada and the United States, raises the odds of another rate cut by the Bank of Canada at its April 16 monetary policy meeting.

For March, employment fell in wholesale and retail trade (-29,000; -1 percent) and information, culture and recreation (-20,000; -2.4 percent). The manufacturing sector shed 7,000 jobs, while agriculture cut 9,000.

Private sector jobs fell by 48,000 in March after an increase of 10,200 in February and a 57,000 rise in January. Public sector employment decreased by 3,000 following February's increase by 7,600, and -8,400 in January. Self-employment increased by 18,000, after declining by 16,800 in February.

March's decline in employment (the first since January 2022), follows February's flat employment reading, and three consecutive monthly increases totaling 211,000 (+1 percent) in November, December and January. Compared to a year ago, employment is up by 347,000 (+1.7 percent) in March.

The participation rate was 65.2 percent in March, vs. 65.3 percent in February and 65.5 percent in January. The participation rate is down 0.4 percentage points compared to a year ago.

Total hours worked rose 0.4 percent following a 1.3 percent decline in February and are up 1.2 percent from a year ago. Average hourly wages are up 3.6 percent year-over-year after the annual growth rate was +3.8 percent in February, and up 3.5 percent in January.

Another modest employment gain of 20,000 is the call, not enough to keep the unemployment rate from rising to 6.7 percent from 6.6 percent in February.

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.