By Robb M. Stewart
OTTAWA--Canadian employment fell for a third month this year in April even as more people were hunting for work, pushing the country's jobless rate to its highest in six months.
Employers in the country cut a net 17,700 jobs last month, Statistics Canada said Friday.
That drop, though modest, rolled back the 14,100 gain seen the month before and meant the jobless rate climbed to 6.9%. The economy has now lost more than a cumulative 112,000 jobs so far in 2026 as the hesitancy that held back hiring for much of last year looks set to linger.
Economists were expecting a thin 10,000 jobs to be added to the economy, which would have left the jobless rate steady at 6.7% for a third straight month.
Canada's unemployment rate has now risen 0.4 percentage point since January, though it remains below the recent peak of 7.1% hit last August and September. The rate has been around a 6.5% to 7% range for a year and a half.
Ali Jaffery, chief economist at KPMG Canada, estimates the long-run level at which Canada's jobless rate should sit in normal times is likely in the low 6% range, which implies an increase in labor-market slack to start the year. That slack supports the view the Bank of Canada can leave interest rates on hold, Jaffery and other analysts argue.
Last month's job losses were again concentrated in full-time work, which fell by 46,700 positions and has declined by roughly 111,000 over the past four months.
Goods-producing industries, which have been hardest hit by U.S. tariffs and weakened demand in the U.S. for Canadian exports, saw a further drop in employment. Areas such as construction and transportation and warehousing--which economists expected could see a recovery after extreme winter weather earlier in the year--recorded among the largest falls in job numbers.
Canada's economy resumed growing this year following a modest contraction in the final quarter of 2025, though the pace remains soft. Concerns over U.S. trade policy and tariffs is holding back business investment, and the recent increase in fuel prices as the conflict in Iran drags on has added to unpredictability.
"Trade uncertainty and increased energy costs are likely making companies very wary of adding to their workforce," Andrew Grantham, senior economist at CIBC Capital Markets, said. "Those worries are unlikely to ease in the near-term, and as a result we see the unemployment rate holding near current levels throughout much of the year," he added.
Slightly more positive for the jobs outlook, the household labor survey showed the labor force expanded in April. After shrinking sharply in the first two months of the year, the labor force expanded for a second month running, growing by 33,500 even as working-age population nudged up only 8,900. Labor-force participation, the proportion of the workforce that had a job or were looking for work, edged up 0.1 point, to 65%, in a sign Canadians were again searching for employment.
The proportion of jobless Canadians who had been continuously looking for work for 27 weeks or more, which is considered long-term unemployment, stood at 22.5% in the latest month. That is little changed from the prior month and from 12 months earlier, but it remains well above a prepandemic average of 17.1%, seen from 2017 to 2019.
At the same time, the monthly layoff rate at 0.6% in April was in line with the prepandemic average and has shown no recent advance.
When calculated using U.S. Labor Department methodology, Canada's unemployment rate rose to 5.7% for the month from 5.5% in March.
"Job security has held strong, and wage growth is still relatively robust," said Brendon Bernard, senior economist at job site Indeed. "But difficult conditions facing job seekers, whether it's youth looking to break into the market or the unemployed trying to get back to work, linger. There's little sign of shifting into high-gear any time soon."
Write to Robb M. Stewart robb.stewart@wsj.com
(END) Dow Jones Newswires
05-08-26 1143ET
