Canada’s jobs report for April showcased the sheer impact of U.S. tariffs as the economy added a mere 7,400 jobs and the unemployment rate rose 0.2 percentage points to 6.9 per cent.
The contrast is stark between the goods-producing sector and the services-producing sector. Goods-producing industries lost 33,000 jobs, while services-producing industries added 40,300 jobs—which more than fully offset these losses. The areas with the biggest losses across all industries were manufacturing (31,000) and trade (27,000), both of which are highly susceptible to tariffs.
Further job losses are expected in the coming months as the unemployment rate is expected to creep above 7 per cent. This could particularly affect manufacturing and trade, as well as other industries that depend on U.S. demand, because of tariffs and trade policy uncertainty.
As the economy slows both in Canada and abroad, job losses could spread to other industries, including travel, real estate and entertainment.
It will be a particularly challenging summer for new graduates to land jobs. The same applies for those currently unemployed, as it is notably more challenging to find work now compared to 2024.
The extent of job losses will depend on the progress of trade negotiations between Canada and the U.S. The silver lining is that Canadian businesses are quickly diversifying and finding new customers; this is evident in the 24.8 per cent increase in exports to other countries in March—the largest increase on record.
The Bank of Canada’s priority still lies in maintaining price stability, which is vital at a time of heightened volatility. If inflation remains near 2 per cent while unemployment spikes, a rate cut in June is possible—but by no means a given.
Breaking down the data
Employment fell by 60,000 among core-aged women (25 to 54 years old) while it rose by 24,000 among core-aged men and by 35,000 for people aged 55 and older.
Despite the threats of U.S. tariffs on digital services and films, the services-producing sector continued to add jobs and helped offset the losses in the goods-producing sector.
Finance, insurance and real estate saw an increase of 24,000 jobs. This indicates the financial-services industry is somewhat shielded from tariff impacts for now.
Public administration saw the largest gain of 37,000 jobs, but this uptick is temporary thanks to the federal election and is not a trend that will last in the upcoming months.
In contrast, private-sector employment saw little change in April as the gains in the services-producing sector cancelled out the losses in manufacturing and trade. This also shows employers’ hesitance to hire in an environment of uncertainty.
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