Canada’s employment change for March 2025 showed a decrease of 32,600 jobs, contrasting with an estimated increase of 10,000. The unemployment rate remained at 6.7%, marking the first rise since November 2024.
Full-time employment fell by 62,000, while part-time jobs increased by 29,500. Total hours worked rose by 0.4%, and average hourly wages increased by 3.6% year-over-year to $36.05.
Sector Employment Changes
Employment decreased mainly in wholesale and retail trade (29,000 jobs lost) and information, culture and recreation (20,000 jobs lost). In contrast, ‘other services’ saw an increase of 12,000 jobs, as well as utilities, which gained 4,200 jobs.
Employment fell in Ontario and Alberta, with losses of 28,000 and 15,000, respectively. However, Saskatchewan experienced an increase of 6,600 jobs.
Private sector employment decreased by 48,000, while public sector employment remained stable, rising 92,000 year-over-year. Self-employment also remained largely unchanged, with an annual increase of 81,000.
The latest employment figures from Statistics Canada show the labour market losing momentum, with a notable decline in full-time roles and job cuts concentrated in consumer-facing sectors. Markets were expecting a gain of 10,000 positions for March, yet employers shed more than three times that number. Full-time employment took the brunt of this adjustment, hinting at waning confidence among businesses, especially in areas more exposed to discretionary spending or variable demand.
Regional And Sectoral Insights
Job losses were not evenly distributed. Ontario and Alberta, known for their larger workforces and more cyclical industries, recorded the deepest contractions. In both provinces, swelling unemployment might indicate regional economic soft spots or tightening in specific sectors such as construction or retail logistics. The job increase in Saskatchewan—while small—could reflect isolated strength in sectors tied to natural resources or public works, something to be monitored rather than leaned on.
Private firms appear to be taking a more defensive stance, trimming 48,000 roles, whereas the public sector held steady, which implies that stability in government-backed employment may now be masking deeper private sector retrenchments. The fact that total hours worked still nudged higher by 0.4% suggests that those still employed are somewhat busier, potentially covering for lost colleagues or responding to backlogged demand. At the same time, an annual wage growth of 3.6% means tightness might still exist in selective job markets, possibly due to longer-term contractual obligations or retention efforts.
From our perspective, this break between falling employment and higher hours worked serves as a reminder that headline job numbers only tell part of the story. Some sectors may be consolidating their workforces but still demanding more output per person. This disharmony is typically tricky for policymakers to navigate, as it implies fragility without providing outright justification for immediate rate changes.
In terms of action, this soft patch in hiring does not, in isolation, imply panic. However, for those exposed to rates or labour-sensitive instruments, it’s important to recognise that while aggregate numbers might improve over time, the volatility in full-time roles could introduce short-term price inefficiencies. Additionally, regional divergences—particularly between energy-dependent provinces and more diversified ones—could offer short-intermediate dislocations. Monitoring this divergence may yield opportunities as expectations adjust.
While wage growth remains elevated by historical standards, it does not appear to be accelerating further. That’s useful, since it reduces the risk of surprise tightening moves in response to overheating pay pressures. With inflation appearing to stabilise elsewhere, this read on the labour market could weaken the case for further hawkish actions, which might shift certain rate expectations downwards in the coming weeks.
Option pricing and curve steepness will deserve watching. The private sector’s retreat may weigh on forward sentiment, particularly if coupled with underperformance in retail and recreation. These are often early signalers when household confidence dips. Weakness in these parts of the economy tends to be self-reinforcing if left unchecked.
So the headline number isn’t just a disappointment—it’s a signal. The way employers are choosing to adapt tells more about where they think demand is headed. And if that direction continues, adjustments across some volatility instruments or front-end rate products may already be underway. We’ll be tracking them closely.
