Canada's unemployment rate ticked up to 6.9% in April, matching pre-pandemic high

Canada's unemployment rate ticked up to 6.9 per cent in April, Statistics Canada said on Friday, matching the highest rate seen in eight years outside of the pandemic.

The economy added a very slight 7,400 jobs during the month. Most of the increase was due to temporary workers hired in the public sector to work on the federal election. There were also job gains in finance, insurance, real estate, rental and leasing.

Those numbers were offset by lower employment in the manufacturing sector, which lost 31,000 jobs as tariff uncertainty related to the U.S. trade war engulfed the industry. The wholesale and retail trade sector lost 27,000 jobs.

"These are the areas of the economy most exposed to trade uncertainty. All show substantial declines," said Brendon Bernard, a senior economist at Indeed.

"We've been waiting all year for signs of a direct hit from the trade war on the economy in general, and the job market specifically," Bernard added. "I think these April numbers were that first real sign."

Without the bump from federal election hiring, the economy would've lost more than 30,000 jobs in April.

Ontario in particular was walloped by the drop in manufacturing jobs, posting the largest decline of any province in this sector, with 33,000 jobs lost.

Windsor — Canada's car capital — saw its unemployment rate tick up to 10.7 per cent as a U.S. tariff on automobiles went into effect.

The national unemployment rate last hit 6.9 per cent in November 2024, a high that — outside of the figures seen at the peak of the COVID-19 pandemic — had not been reached since January 2017. In March, the rate stood at 6.7 per cent.

Tariffs taking 'material bite' out of economy

More young men were searching for work in April, which sent the unemployment rate for that age group (15-24) up slightly.

In general, people who were unemployed continued having a harder time finding work in April than they did a year earlier, Statistics Canada noted.

"The share of workers being laid off may increase during periods of economic downturn or disruption. Among those who were employed in March 2025, 0.7 [per cent] had become unemployed in April due to a layoff," it said.

Average hourly wages grew 3.4 per cent in April (or $1.20, to $36.13) — up from the same time a year earlier but at a slower rate than March's 3.6 per cent.

Hours worked increased 0.4 per cent, up almost one per cent from this time last year.

While that last metric is a bright spot, "it doesn't take an archaeological dig to realize this is a weak report," wrote Doug Porter, chief economist at Bank of Montreal, in a note to clients. 

"This is the first major data reading for April, and it shows that tariffs are already taking a material bite out of the economy," he wrote, adding that the report increases the odds of a 25-basis point interest rate cut by the Bank of Canada in June.