MNI: Canada Has Biggest Full-Time Job Loss Since Apr 2021

Full-time employment in Canada recorded the biggest decline in four years in March led by wholesaling and retailing, a setback to the central bank's view its string of rate cuts since June is boosting domestic momentum even with the country headed to a U.S. trade war.

Those full-time job losses totaled 62,000 versus a smaller gain of 29,500 part-time positions. That left total employment down 32,600 on the month versus an MNI consensus for a gain of 10,000, and was the biggest fall in jobs since January 2022. 

The unemployment rate climbed a notch to 6.7% as economists predicted, bringing it closer to a post-pandemic high of 6.9% set in November. Joblessness has climbed from 5% over the last two years, slack that encouraged the BOC to cut rates faster than G7 peers. Statistics Canada noted long-term unemployment, people seeking work for at least 27 weeks, climbed 18% from a year earlier.

Bank of Canada Governor Tiff Macklem said at the last rate meeting officials will be cautious when it comes to further rate relief given competing risks from tariffs around weaker demand and price increases picking up again. The key lending rate has returned to neutral and core inflation has remained above the 2% target for headline prices, and unlike the Fed Canada's central bank has no dual mandate to seek maximum employment alongside stable inflation.

Job losses were also led by the 47,800 decline in private-sector employment that some investors see as a better indicator of economic momentum. Hours worked rebounded with a 0.4% increase in March after a 1.3% decline in February amid severe winter storms, but were up a weak 1.2% year-on-year. Average hourly wage growth slowed to 3.6% from 3.8%. 

Reading the job market is complicated by the government's move late last year to curb record immigration to the point where some economists say population growth will stall and bring a slowdown in potential output. Some households are also being pinched as they refinance five-year mortgages at rates reflecting most of the Bank's earlier tightening to quell inflation. Finally, campaigning ahead of an April 28 federal election has seen both major party leaders promising tax cuts and spending to help workers suffering from U.S. tariffs.