By Robb M. Stewart
OTTAWA--Canada's jobless rate pushed back up in December as a recent surge in hiring stalled and more people were searching for work, closing out a soft year for a labor market roiled by tariffs and uncertainty.
Employment in the country was little changed for the month, nudging up a net 8,200 after employers added almost 181,000 jobs over the previous three months, Statistics Canada said.
The unemployment rate climbed to 6.8% after cooling two months running to 6.5%, a more than one-year low.
In all, there were 1.6 million Canadians unemployed to end 2025, an increase of 4.9% for the month as the labor force expanded sharply and the participation rate--the proportion of the working-age population that was employed or looking for a job--increased 0.3 percentage point to 65.4%.
Economists were expecting the unemployment rate to rise to 6.7% in December with the loss of a modest 2,500 jobs for the month.
The labor market in Canada softened through much of last year, in part as the economy was hit hard by the Trump administration's threat and imposition of tariffs on exports to the U.S. There was almost no net job growth in the first eight months of the year, and the unemployment rate in that time rose steadily to 7.1% high in August before hiring rebounded.
The Bank of Canada projects modest growth for the economy this year after being badly dented by the trade conflict with the U.S. and as labor market softness weighs on household spending. The federal government's efforts to cool immigration also are expected to weigh on growth.
The Canadian Federation of Independent Business monthly barometer showed a recovery in optimism among the country's small businesses in December to a year-long high, though more than half of companies report insufficient demand and staffing plans overall remain weak as more businesses plan to reduce full-time positions than hire.
There was a strong 50,200 rise in full-time employment numbers in December, though that was moderated by a 40,000 drop in part-time positions.
There was a rise in the number of people working in health care and social assistance, as well as in other services such as personal and repair services, but job losses for the latest month in professional, scientific and technical services, accommodation and food services, and utilities.
When calculated using U.S. Labor Department methodology, Canada's unemployment rate was 0.1 percentage points higher at 5.7%.
Adding to the dovish tone of the labor force survey, wage growth cooled for the month, though it continues to outpace annual consumer price inflation that sits just above the Bank of Canada's 2% target. Wages for permanent employees rose 3.7% on a year earlier, softer than the 4.0% advance the month before and the 3.8% growth economists expected.
The employment rate, the proportion of the working-age population that is employed, held steady at 60.9% in December.
Statistics Canada's survey showed little change in the numbers of private and public sector employees, as well as in the ranks of the self-employed.
Write to Robb M. Stewart robb.stewart@wsj.com
Corrections & Amplifications
This headline was corrected at 11:17 a.m. ET because it incorrectly described the statistic as employment rate in the headline. Canada's unemployment rate jumped to 6.8%.
(END) Dow Jones Newswires
01-09-26 0914ET
