| Consensus | Consensus Range | Actual | Previous | |
| Employment - M/M | 16,000 | 6,000 to 25,000 | -17,700 | 14,100 |
| Unemployment Rate | 6.7% | 6.6% to 6.7% | 6.9% | 6.7% |
Highlights
The Canadian labor market started the second quarter with a disappointment as the economy shed 17,700 jobs in April, the third decline in four months, with a cumulative employment decrease of 112,300 since the beginning of the year. The consensus expectation had centered on a 16,000 increase in an Econoday survey, with forecasts projecting an employment growth of at least 6,000 and a steady unemployment rate of 6.7 percent. Instead, the unemployment rate rose to 6.9 percent, last matched in October 2025. The participation rate edged up to 65.0 percent, up from 64.9 percent.
As the Bank of Canada continues to assess the net impact of the Middle East conflict on both growth and inflation, today's report provides some breathing room on the inflation front, as average hourly wage growth among employees slowed to 4.5 percent year-over-year from 4.7% in March. What's more, a recent change in the composition of employment explains much of the wage growth acceleration from the average of 3.4 percent in 2025, with a lower proportion of employees with short term tenure. When keeping the employment composition constant, wage growth was 3.4 percent in April, down from 3.6 percent in March and 3.5 percent in February.
Job losses were concentrated in full-time positions, down 46,700 in April, while part-time employment was up 29,000. Both the public and private sectors shed jobs on the month, with declines of 9,500 and 2,600, respectively. Self-employment decreased 5,700.
Looking at the sector breakdown, goods-producing industries led the deterioration, with employment down 26,800 as all major categories recorded a decline, led by a 15,700 drop in construction. Employment in natural resources decreased 5,500. Utilities were down 3,500 and manufacturing down 1,500.
Services proved more resilient, with 9,100 positions added in April, led by gains of 21,500 in business, building and other support services, 17,500 in health care and social assistance, and 13,000 in accommodation and food services. These increases were partly offset by employment declines of 24,800 in information, culture and recreation, 12,700 in other services (except public administration), 10,500 in transportation and warehousing, and 8,300 in wholesale and retail trade.
Market Consensus Before Announcement
Employment bouncing back a bit in March and April from losses early in January and February but not enough to move the jobless rate from 6.7 percent in April.
Definition
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.
Description
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.