Canada’s labour market lost 2,200 jobs in March and the unemployment rate increased to 6.1 per cent, Statistics Canada said on Friday.
The increase in unemployment, up 0.3 percentage points from the previous month, was driven by an increase of 60,000 people searching for work or on temporary layoff, Statistics Canada said on Friday. It's the biggest monthly jump since Aug. 2022, and the highest rate since January 2022, when unemployment reached 6.5 per cent. Outside the COVID-19 pandemic, the last time Canada's unemployment rate hit 6.1 per cent was Nov. 2017.
Economists polled by Reuters had expected a net gain of 25,000 jobs in March, and the unemployment rate to edge up from 5.8 per cent in February to 5.9 per cent.
"The cracks that had been emerging within the Canadian labour market suddenly got a lot wider," CIBC economist Andrew Grantham wrote in a research note on Friday, noting that while the loss of 2,200 net jobs "isn't a large decline given the volatility of monthly labour market data", it came in contrast to Canada's surging population.
"While markets had been pushing back expectations for a first Bank of Canada interest rate cut following strong GDP data to start the year, today's labour force data should see them pulling those expectations forward again closer in line to our expectation for a first move in June."
Expectations that the Bank of Canada will soon cut rates have started to rise in light of recent data. Canada's inflation rate unexpectedly cooled to 2.8 per cent in February, marking the second month in a row that inflation hit within the central bank's target range of between one and three per cent.