By Promit Mukherjee
OTTAWA, April 10 (Reuters) – Canada’s job growth remained subdued in March while the unemployment rate remained unchanged at 6.7% from the prior month, data showed on Friday, signaling continued slack, or underutilized workforce, in the labor market.
Employment in March rose by a net of 14,100 jobs against a slump of 83,900 in the prior month, Statistics Canada said.
This was the first time this year that the job market grew, even though the gains were modest and was nowhere near enough to offset a whopping 109,000 total job losses in the first two months of the year.
Analysts polled by Reuters had forecast job gains of 15,000 in March and had expected the unemployment rate to edge up to 6.8%.
Canada’s economic momentum has weakened over the past year following a wave of U.S. tariffs on key sectors including steel, aluminum, autos, copper and lumber. While the economy has so far avoided a recession, the fallout has led to layoffs in trade-exposed industries and subdued hiring elsewhere.
The inflationary effects of the war in the Middle East and uncertainty around a review of a free trade deal with the U.S. also looms heavily on the economy.
The unemployment rate among the core-aged workforce, 25-54 years old, and among the youth remained unchanged in March from February, data showed.
While unemployment in Canada continues to be elevated, economists predict this would gradually ease as population growth cools.
The job gains in March were entirely led by part-time jobs which increased by 15,200. Full-time jobs dropped by 1,100, the statistics agency said.
Lower full-time work, along with a high unemployment rate, are indicators of slack in the economy and is closely watched by the Bank of Canada for its monetary policy decision.
Another closely-tracked indicator is the average hourly increase in permanent wages. This metric showed wages rose by 5.1% in March on a year-on-year basis, its highest in the last 20 months.
The goods-producing sector, which is primarily the most exposed to U.S. tariffs, saw employment increase by 12,500 jobs while the services sector, where four out of every five people are employed in Canada, reported a modest 1,700 job gains.
This is the last labor force data before the BoC’s monetary policy decision later this month. Money markets are pricing in no change in policy rate but betting on one 25-basis-point increase in the later part of the year.
The Canadian dollar pared losses and was trading down 0.05% to C$1.3821 against the U.S. dollar, or 72.35 U.S. cents. Yields on the two-year government bonds were down 0.8 basis points after the jobs data to 2.514%.
(Reporting by Promit Mukherjee; Editing by Dale Smith and Toby Chopra)
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