Canada\u2019s labour market lost a net 83,900 jobs in February and the unemployment rate increased to 6.7 per cent, driven by a substantial decline in full-time positions, according to Statistics Canada data released on Friday.<\/p>\n
The results were far below the slight job gain forecast by economists. The employment rate \u2014 the share of the population aged 15 and older who are working \u2014 fell 0.2 percentage points to 60.6 per cent, marking a second consecutive monthly decline and leaving it just above a recent low reached last summer.<\/p>\n
In a note to clients, BMO chief economist Douglas Porter calls the February Labour Force Survey (LFS) data \u201ca simply brutal result,\u201d noting that it \u201cranks as one of the worst (non-pandemic) months ever for jobs.\u201c He declares the report \u201cweak almost from head to toe\u201d and points to \u201ca near absence\u201d of net job growth in the last 12 months.<\/p>\n
\u201cSomehow, the market continues to price in Bank of Canada rate hikes for later this year, but if this employment report is at all indicative of underlying economic conditions, the last thing the Bank would be considering would be rate hikes,\u201c Porter concluded.<\/p>\n
The February numbers suggest \u201ca worrisome turn\u201d for Canada\u2019s job market, CIBC economist Katherine Judge wrote, with a loss of 108,000 full-time jobs \u2014 73,000 of those in the private sector.<\/p>\n
\u201cOverall, this is clearly a very worrisome report for the [Bank of Canada] that shows that labour market slack has increased and activity is frozen amidst trade uncertainty,\u201c she said.<\/p>\n
Indeed Canada senior economist Brendon Bernard also notes the report\u2019s weakness, while cautioning that the LFS has swung above and below forecasts with unusual frequency in recent months.<\/p>\n
\u201cThe LFS is quite volatile: 2026 started weak, but it followed a surprisingly strong stretch to end 2025,\u201d Bernard said in an emailed statement. \u201cAt least some of the recent slip appears to be a direct reversal of that earlier strength. Youth employment rates in particular have fallen back to their September levels after bouncing up towards the end of the year. To the extent that the previous strength was exaggerated, the trend has returned back to the mean.\u201c<\/p>\n
There were 47,000 jobs lost among youth aged 15 to 24, bringing the youth unemployment rate up 1.3 percentage points to 14.1 per cent, which Statistics Canada notes is \u201ccloser to the recent high of\u00a014.6 per cent reached in September\u00a02025.\u201c<\/p>\n
Average hourly wages rose 3.9 per cent compared with a year earlier. However, Desjardins Group economist Royce Mendes warns that the increase appears driven by composition effects, as job losses were concentrated in lower-paid positions, \u201cwhich mechanically pushes up the average wage reading.\u201c<\/p>\n
By sector, the largest declines were in services-producing industries (down 56,000 jobs; a minus 0.3 per cent drop from January), and goods-producing industries (down 28,000; a minus 0.7 per cent drop). Judge declares the job losses \u201cwidespread across industries.\u201d<\/p>\n
The downturn was felt most acutely in Quebec, where employment plunged by 57,000. This marks the province’s first significant employment decrease since early 2022 and pushed its unemployment rate up 0.7 percentage points to 5.9 per cent. British Columbia also saw a notable drop of 20,000 positions. Manitoba\u2019s unemployment rate fell by 0.6 percentage points to 5.7 per cent, driven not by job gains but by people leaving the workforce.<\/p>\n