The labour market eked out a small gain last month, likely keeping the central bank on the sidelines for now
Canada’s economy posted its first monthly jobs gain of 2026 in March, although employment growth was modest and the unemployment rate remained unchanged at 6.7%.
Statistics Canada said on Friday that the labour market tacked on 14,000 jobs last month, with the number of part- and full-time employees remaining largely unchanged.
The report suggested the economy is ticking slowly along, and marked a mild reprieve from the huge job losses reported in January and February.
Average hourly wages inched upwards by 4.7% ($1.68), and the natural resources industry and “other services” were responsible for the biggest upswings in employment.
That wage growth was the most noteworthy development from March’s jobs report, according to Bank of Montreal (BMO) chief economist Doug Porter, who indicated in a note that the trend would be closely watched by Bank of Canada decisionmakers in the coming months.
“The only real new news here is that wages seemingly popped, which the Bank of Canada will keep an eye on, particularly as it is already on high alert for signs of any spillover from higher energy prices to broader inflation,” he wrote.
TD director and senior economist Andrew Hencic suggested that the outlook remained “fraught” for the Canadian economy despite the slight jobs gain, mainly because of uncertainty over the duration of the US-Israel-Iran conflict.
“How long the conflict lasts and energy supplies remain disrupted will determine the size of the inflation shock,” he wrote. “For now, weak demand conditions should provide some offset to inflationary pass-through, allowing the Bank of Canada to stay on the sidelines and wait to see how things play out.”
That conflict, which has jolted oil prices and bond markets, arrived as the Canadian economy was still grappling with the impact of US tariffs imposed by Donald Trump last year.
A new report by Royal Bank of Canada (RBC) said the Canadian economy had proven more resilient to that tariff wave than first feared, although it had still sustained significant damage below the surface.
Hencic said March’s jobs report underlined the “lack of dynamism” currently at play in Canada’s labour market.
“The unemployment rate remains elevated, with the lack of hiring showcasing the general apprehension in the economy,” he said. “With the economy continuing to progress in fits and starts, and uncertainty sky-high, the outlook is for subdued job growth and a steady unemployment rate.”
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