OTTAWA, April 4 (Reuters) - Canada's total employment fell and the unemployment rate ticked up in March, data showed on Friday, as impact of uncertainty around tariffs and their subsequent implementation took a toll on hiring and spurred some layoffs.
The country's employment number dropped by a net of 32,600 people, the first decrease in more than two years driven by a steep decline in full-time work, Statistics Canada said.
The decline in March followed a largely flat growth in jobs in February and robust expansion of 211,000 new jobs from November to January.
Analysts polled by Reuters had forecast a net job addition of 10,000 people and had estimated the unemployment rate to rise to 6.7%.
Most economists had expected the job market to start showing signs of weakening as companies held back on investments and hiring due to the uncertainty around tariffs and their subsequent implementation.
Trump has imposed a 25% tariff on Canadian steel and aluminum from March and slapped import duties on cars and parts based on non-U.S. content and non-compliance to a free trade deal. He has also announced sweeping reciprocal tariffs across all trading partners.
Reuters had reported last month that job losses had already started in some sectors, and economists predict that these will only rise as sweeping reciprocal tariffs across trading partners work through the system.
The rise in unemployment rate, or the number of people unemployed as percentage of the labor force, was 0.1 percentage point higher that the prior month and the first increase since November last year, Statscan said.
In total, there were 1.5 million unemployed people in March, up 36,000 in the month and up 167,000 on a year-over-year basis, it said.
The Bank of Canada said last month Canadians were more worried about their job security and financial health as a result of the trade tensions, and they intend to spend more cautiously.
Statscan said amongst the total unemployed, about 44% had lost their job due to a lay-off within the previous 12 months. Of these, 18.4% last worked in construction, while 12.4% last worked in wholesale or retail trade.
However it clarified that March layoff rate - the proportion of the employed population in a given month who were unemployed the following month due to a layoff - was 0.7%, similar to the pre-pandemic period.
The average hourly wage growth of permanent employees, a metric closely watched by the BoC too gauge inflationary trends, was at 3.5% in March from 4% in February.
Reporting by Promit Mukherjee; Editing by Dale Smith
Source: Reuters