MNI: Canada Factory, Wholesale Jobs Fall In April Amid Tariffs

Canada's factory and wholesale employment fell in April as U.S. tariffs took hold, boosting the unemployment rate more than expected to match the highest since 2017 excluding the pandemic.

The overall employment gain was limited to 7,400 in April, curbed by falls of 30,600 in manufacturing and 26,800 in wholesaling and retailing. Weak job gains and growth in the labor force lifted the unemployment rate more than economists predicted to 6.9% from 6.7%, according to Statistics Canada's report Friday. The biggest job gain was 37,100 in public administration, boosted by temporary election workers and a category economists tend to discount as being disconnected from the economic cycle.

April marks the third month of tepid job numbers following a decline in March and little change February, adding to signs that the economy will stall or shrink this quarter because of the trade war with the U.S. Governor Tiff Macklem said yesterday that while there have been some hopeful signs including Prime Minister Mark Carney's friendly visit with President Donald Trump this week it's too early to consider a scenario of lesser economic damage. 

Ontario, the province that's home to Canada's major auto plants, posted the biggest job drop at 34,600. All the job losses were higher-paying full-time positions. 

Most economists see the Bank cutting the 2.75% benchmark lending rate a few more times later this year as the economy stumbles. The Bank has also cautioned it must ensure one-time price increases from tariffs don't drive up inflation expectations. Wage gains were in line with the Bank's view they are slowing, though the year-over-year pace is elevated even with the April move to 3.4% from March's 3.6%.

Statistics Canada said that after adjusting its unemployment rate to how it's measured in the U.S., the jobless rate in Canada is 1.6 percentage points greater than south of the border. That matches the gap set in January that was the widest since the pandemic. The average gap over a few years before the pandemic was 0.9 percentage points.