After several months of anticipation, the April Labour Force Survey showed the first direct hit from the trade war. Overall employment held steady, but the signs were evident underneath the surface. Trade-exposed industries such as manufacturing, wholesale and retail trade, and natural resources, fell significantly. A jump in public sector employees, led by temporary election-related staffing, helped offset the drop. These numbers stood in contrast to the March data, which showed a more negative headline number, but weren’t led by industries exposed to US tariffs to the same degree.
The geography of the weak job numbers also pointed to trade. Ontario experienced substantial employment losses, and within the province, unemployment was up notably in the highly US-integrated Windsor area.
The weak details of the April job numbers highlight the negative turn the Canadian economy could face if trade tensions don’t cool. Conditions were already trending in the wrong direction, and now with the unemployment rate approaching 7%, more months like this would send the labour market to its weakest state (outside the pandemic) in years. It’s already been a challenge for many job seekers, particularly youth, but further deterioration would mean the pain will start spreading to workers who have been insulated from the weakening labour market over the past two years.
