Statistics Canada reported a pointy drop in employment Friday that caught economists abruptly.
“This was a really dangerous report on virtually each single measure,” mentioned CIBC senior economist Katherine Choose.
StatCan mentioned Friday that Canadian employers collectively shed 84,000 positions in February, driving the unemployment fee up two tenths of a degree to six.7 per cent.
February noticed greater than 100,000 jobs misplaced in full-time work, whereas personal sector employment fell by 73,000 positions.
A Reuters ballot of economists heading into Friday’s launch anticipated a slight rise within the unemployment fee but in addition known as for a achieve of 10,000 jobs final month.
The labour market added a cumulative 189,000 positions within the remaining 4 months of 2025, however 2026 has offset a few of these positive factors with two consecutive months of job losses to start out the 12 months. February’s shock decline follows a lack of 25,000 jobs in January.
StatCan mentioned that, in comparison with the identical month a 12 months in the past, complete employment was little modified in February.
Talking to reporters throughout a media availability in Norway on Friday, Prime Minister Mark Carney pinned the blame for the latest spate of job losses on Canada’s fractious commerce relationship with the US.
“Given the dimensions of the commerce actions, the uncertainty that’s related to the commerce actions in the US, that’s inflicting large changes within the financial system,” Carney mentioned.
Alberta MP Garnett Genuis, employment critic for the federal Conservatives, mentioned Carney’s insurance policies have been failing to enhance job prospects for Canadians because the prime minister nears a 12 months within the workplace. In a media assertion, he highlighted a rebound within the youth unemployment fee to above 14 per cent final month as trigger for concern.
Younger employees aged 15 to 24 confronted a lack of 47,000 jobs final month, StatCan mentioned. Males between the ages of 25 and 54 additionally confronted steep job losses in February.
“As employment continues to fall, Liberals have ignored our proposals and didn’t put ahead any options to their jobs disaster,” Genuis mentioned.
The wholesale and retail commerce sector led job losses final month, with different industries within the companies facet of the financial system additionally contracting. Items-producing industries like development and manufacturing shed positions, whereas the transportation and warehousing business and public administration reported positive factors.
Choose mentioned that labour market weak point had been largely contained to sectors like manufacturing which can be most uncovered to U.S. tariffs. However with solely three sectors reporting job positive factors final month, she mentioned these cracks are spreading.
“That is very worrisome for the Financial institution of Canada,” she mentioned.
The central financial institution is ready for an rate of interest determination on Wednesday after holding its key fee at 2.25 per cent in January. Financial policymakers will get a take a look at inflation knowledge for February on Monday earlier than making the decision.
TD Financial institution senior economist Andrew Hencic mentioned in a word to purchasers Friday that the shrinking labour pressure, a rising unemployment fee and steep job losses make the newest employment knowledge a “decidedly weak report.”
Hencic mentioned the financial system is struggling to realize traction within the face of structural modifications, equivalent to ongoing commerce uncertainty.
He additionally flagged that the conflict within the Center East is a “wildcard” for the financial system by way of how lengthy the battle will final. An prolonged disruption will imply a chronic bout of inflation tied to increased vitality prices, which Hencic mentioned may have knock-on results for shopper spending and progress extra broadly.
Choose mentioned that, from the Financial institution of Canada’s perspective, February’s labour market softness ought to offset inflationary pressures from the latest oil spike.
She mentioned CIBC’s name remains to be for the central financial institution to stay on maintain for the remainder of the 12 months, although weak point in knowledge like Friday’s report tilt dangers towards an additional reduce.
Monetary market odds for subsequent week’s fee determination are 90 per cent in favour of a maintain, barely diminished from earlier than the roles report, in keeping with LSEG Knowledge & Analytics.
StatCan mentioned Friday that Quebec misplaced 57,000 jobs in February, which the company known as the primary vital lack of employment within the province in over 4 years. The jobless fee within the province rose 0.7 proportion factors to five.9 per cent final month.
British Columbia in the meantime shed 20,000 positions, and Saskatchewan and Manitoba additionally misplaced jobs.