Labour Force Survey February 2025: Canada’s Labour Market on “Pause” Before Tariffs Hit

Canada’s labour market was in a holding pattern in February, with employment largely unchanged and the unemployment rate holding steady. While employment only rose by 1,100 jobs last month, this shouldn’t be a surprise, following three unexpectedly strong months of job growth, which saw 211,000 positions added from November to January during a period of significant tariff uncertainty. With all the uncertainty coming from south of the border due to constantly shifting tariffs and threats, financial markets are betting that the Bank of Canada will continue cutting interest rates next week.

KEY TAKEAWAYS

• Employment held steady in February, adding just 1,100 jobs after three months of strong gains—well below market expectations of 20,000. Job quality dipped slightly as full-time losses were offset by part-time gains.
• The unemployment rate remained at 6.6%, slightly better than the 6.7% forecast, as labour force participation fell 0.2 percentage points. Population growth slowed to its lowest pace in nearly three years, likely reflecting federal efforts to rein in immigration.
• Total hours worked fell 1.3% in February, erasing January’s gains, and were up just 0.5% year-over-year. However, this comes with a major caveat—severe snowstorms during the survey period likely skewed results.
• Average hourly wages rose 3.8% year-over-year, a slight acceleration from 3.5% in January.
• By industry, employment rose in wholesale and retail trade (+51K, +1.7%) and finance, insurance, and real estate (+16K, +1.1%). Declines were seen in professional services (-33K, -1.6%) and transportation and warehousing (-23K, -2.1%).
• Regionally, employment fell in Nova Scotia (-4.3K, -0.8%) and remained largely unchanged across other provinces. 

SUMMARY TABLE

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