Key points:

  • After a brief show of strength at the turn of the year, job growth ultimately disappointed to end Q1 2025. It’s unclear how much of the weakness was trade uncertainty-related, rather than a continuation of 2024’s trends. 
  • Youth employment remains weaker than other demographics, including among recent post-secondary/university grads, whose unemployment rate averaged 11.2% in Q1 2025, highest for this period (outside of the pandemic) in more than 20 years.  
  • Canadian job postings were down a relatively modest 4.3% between the start of February and mid-April. Trends have been relatively weak in trade-exposed occupations, including manufacturing and driving, as well as in Southwest Ontario, suggesting some tariff-pessimism creeping in. 
  • Posted wages as measured by the Indeed Wage Tracker grew 2.8% year-over-year in Q1, similar to the prior quarter but down from earlier periods and consistent with the broader labour market softening. However, other wage metrics have been mixed, including surprising strength in pay gains in the payroll data. 

Like all recent Canadian economic data, tracking labour market developments in Q1 2025 felt like sleepwalking. The year started off strong before softening again, trends ultimately evolving similarly to the gradual job market weakening that played out in 2024. And while there weren’t clear direct links between the looming trade war and the latest job numbers, the recent ups and downs have felt like a prelude of what’s to come… or not. 

Job market disappoints to end Q1 as earlier momentum was fleeting

The labour market surprisingly perked up around the turn of the year, with job growth in both the Labour Force Survey (LFS) and Survey of Employment, Payrolls, and Hours (SEPH) catching some wind in December and January. But that strength was short-lived, and headline growth in the LFS flatlined in February and turned south in March. Overall, the 6.7% unemployment rate in March matched where it stood in both August and December, holding relatively steady over the past six months, despite being well above its 5.0% rate in March 2023.

Line graph titled “Employment slipped to end Q1, reversing earlier momentum” shows the change in Canadian employment according to the LFS and SEPH, and population from June 2022 through March 2025, according to the LFS and SEPH. Both metrics of job growth slowed after January, following an uptick in momentum.
Line graph titled “Employment slipped to end Q1, reversing earlier momentum” shows the change in Canadian employment according to the LFS and SEPH, and population from June 2022 through March 2025, according to the LFS and SEPH. Both metrics of job growth slowed after January, following an uptick in momentum.

The weak March LFS stood out, given the trade-related uncertainty swirling around the economy, but there wasn’t a clear, direct connection between the two. Job losses in lower-paying services led the decline, rather than the more trade-exposed manufacturing industry. Meanwhile, slow hiring remained the main drag on the job market, while layoffs — which could be one of the first dominoes to fall if tariffs’ effects start to bite — remained relatively low. Overall, the hiring rate in Q1 was down 33% from its 2017-2019 average, while the layoff and discharge rate was down 19%. 

Two-panel line chart titled “Both hiring and layoffs remained low in March” shows the share of Canadian employees who started a new job, or were laid off, with four lines in each panel, representing the monthly rate in 2023, 2024, 2025, and the average over 2017-2019. Both measures of labour market dynamics were below their pre-pandemic norms in March. 
Two-panel line chart titled “Both hiring and layoffs remained low in March” shows the share of Canadian employees who started a new job, or were laid off, with four lines in each panel, representing the monthly rate in 2023, 2024, 2025, and the average over 2017-2019. Both measures of labour market dynamics were below their pre-pandemic norms in March. 

Struggles mounting for job seekers

Even before the full fallout of the trade war is really felt, Canadian job seekers are still struggling. One sign of deteriorating conditions is rising long-term joblessness. In March 2025, 3.5% of adults ages 25-to-54 wanted a job but hadn’t worked in over six months, up from 2.9% a year earlier. This was the highest share recorded during this time of year (outside of the pandemic) since 2014, weaker than the trend suggested by the overall unemployment rate, which is still at 2017 levels. 

Line chart titled “Long-term joblessness is building up” shows the share of the age 25-54 population who’ve worked before and want a job, but have been out of work for over 6 months, for each March between 2006 and 2025. The share has increased over the past two years, to its highest non-pandemic level since 2014. 
Line chart titled “Long-term joblessness is building up” shows the share of the age 25-54 population who’ve worked before and want a job, but have been out of work for over 6 months, for each March between 2006 and 2025. The share has increased over the past two years, to its highest non-pandemic level since 2014. 

Young workers have been most acutely affected by weaker job-seeker conditions. The share of teens working has plunged, likely partly related to Canada’s population surge in recent years. However, the soft hiring environment has also hit prospects for recent grads. During the first quarter of 2025, the unemployment rate among those under age 25 with university or post-secondary education (and not currently enrolled in school) averaged 11.2%, the highest Q1 rate in more than two decades (again, excluding the pandemic). Just two years earlier, the unemployment rate among this group was 7.2%, one of its lowest levels over the same period.

Line chart titled “Recent grads are struggling” shows the Q1 average unemployment rate among post-secondary/university grads under age 25 not currently enrolled in school between 2006 and 2025. Their unemployment rate has jumped over the past two years to its highest non-pandemic level in over 20 years. 
Line chart titled “Recent grads are struggling” shows the Q1 average unemployment rate among post-secondary/university grads under age 25 not currently enrolled in school between 2006 and 2025. Their unemployment rate has jumped over the past two years to its highest non-pandemic level in over 20 years. 

Job postings have slipped, but not dramatically

Recent business surveys have reported drops in employer hiring plans amid trade uncertainty. But this negative sentiment has been less evident in job postings. As of April 18, total Canadian job postings on Indeed were down 4.3% since the start of February — when US tariffs on imports from Canada were first signed into law — a fairly modest dip compared to monthly declines amid their broader slide since 2022. New job postings (those active for seven days or less) have also held up, suggesting the stable overall trend doesn’t just reflect earlier postings. 

Line chart titled “Job postings are down (modestly) in recent months” with different coloured lines showing the index of total and new Canadian job postings between June 2024 and April 18, 2025. Both total and new postings have eased, but relatively modestly since US tariffs were first signed on February 1, 2025. 
Line chart titled “Job postings are down (modestly) in recent months” with different coloured lines showing the index of total and new Canadian job postings between June 2024 and April 18, 2025. Both total and new postings have eased, but relatively modestly since US tariffs were first signed on February 1, 2025. 

Beneath the surface, there are signs that trade uncertainty has weighed on demand for certain occupations and in certain regions. Job postings in both driving and manufacturing have been among the worst performers over this period since the start of February, down 11% and 10%, respectively. Moreover, postings in trade-exposed Southwest Ontario (including Windsor, Sarnia, London, Guelph, Brantford and Kitchener-Waterloo-Cambridge) were down 8.5% between early February and mid-April, notably weaker than the national average. While these moves haven’t been particularly severe in the context of the larger overall decline in Canadian job postings, they point to creeping pessimism that could substantially damage the labour market if the trend continues.

Bar chart titled “Trade-exposed occupations have been among the weaker categories lately” shows the highest and lowest percent change in Canadian job postings by occupation between February 1 and April 18, 2025. Driving and manufacturing postings have been among the weakest over the period, while job types have been more mixed. 
Bar chart titled “Trade-exposed occupations have been among the weaker categories lately” shows the highest and lowest percent change in Canadian job postings by occupation between February 1 and April 18, 2025. Driving and manufacturing postings have been among the weakest over the period, while job types have been more mixed. 

Meanwhile, postings in some sectors that previously had been holding up well have slipped, while job ads for certain roles that are down compared to pre-pandemic levels have perked up. In particular, postings for several care-economy roles that were faring quite well, including therapy, community and social service, and education, but have dipped since February. Conversely, several sectors that have done better than average recently were areas where demand was already quite weak, including white-collar occupations such as software development and marketing, as well as retail and customer service. 

Mixed signals from wage growth

The Indeed Wage Tracker has been telling a similar story about the labour market as the number of postings, just with a bit more of a lag. Advertised wages and salaries in Canadian job postings grew 2.8% year-over-year on average in Q1 2025, matching the previous quarter but continuing the gradual deceleration in posted wage growth since it peaked at 5.1% in mid-2022. The story behind this cooldown is straightforward: Both the labour market and inflation have softened, reducing the need for employers to offer elevated pay increases to attract candidates. However, actual measures of hourly pay from the LFS and SEPH haven’t been as consistent. 

Line chart titled “Posted wage growth has been gradually easing” shows the 3-month average of year-over-year growth in posted wages on Indeed job postings between March 2019 and March 2025. Posted wage growth slowed to 2.8% in March, continuing its gradual downward trend. 
Line chart titled “Posted wage growth has been gradually easing” shows the 3-month average of year-over-year growth in posted wages on Indeed job postings between March 2019 and March 2025. Posted wage growth slowed to 2.8% in March, continuing its gradual downward trend. 

Adjusting for changing jobs-mix, hourly pay growth reported by respondents in the LFS has eased, growing at a 3.8% year-over-year pace in March. Part of the still-somewhat-elevated rate reflects a recent acceleration in wage growth among public sector employees, which has surpassed flagging private sector wage growth after lagging behind for several years.

Line chart titled “Surprising surge in SEPH wage growth, in contrast to LFS” shows year-over-year growth composition adjusted hourly wages according to SEPH and the LFS, between March 2019 and March 2025. SEPH wage growth was above 5% year-over-year through February, while LFS growth was slower at 3.8%.
Line chart titled “Surprising surge in SEPH wage growth, in contrast to LFS” shows year-over-year growth composition adjusted hourly wages according to SEPH and the LFS, between March 2019 and March 2025. SEPH wage growth was above 5% year-over-year through February, while LFS growth was slower at 3.8%.

Conversely, fixed-weight wage growth in SEPH has been surprisingly strong, on a 5.4% year-over-year (3-month average) in February 2025, after accelerating through the second half of 2024 and peaking in December. This pace exceeds both other metrics and recent pay gains in SEPH itself. Public sector-related industries, including education and healthcare, have likely contributed to the rise, but the trend has been relatively broad-based, with few obvious causes. 

The Bank of Canada’s April Monetary Policy Report emphasized the cooling trend in LFS wage growth rather than the acceleration in SEPH. Still, given the latter data is observed directly in Canadian payroll data rather than originating from a household survey, it’s worth some attention, particularly as we wait for inflation to sustainably settle at its 2% target. 

Waiting for the shoe to drop

The Canadian economy remains in limbo as we approach the year’s midpoint. The Bank of Canada has resorted to providing scenarios for near-term economic conditions, rather than a singular forecast, because so much hinges on how the trade situation evolves. The labour market operates downstream of these developments, but given the timeliness of the data, it will still provide some of the early signals of the fallout that could be in store if the situation doesn’t resolve. 

Methodology

All job postings figures in this blog post are the index of seasonally adjusted Canadian job postings on Indeed, rebased to February 1, 2020, using a seven-day trailing average. 

The number of job postings on Indeed, whether related to paid or unpaid job solicitations, is not indicative of potential revenue or earnings of Indeed, which comprises a significant percentage of the HR Technology segment of its parent company, Recruit Holdings Co., Ltd. Job posting numbers are provided for information purposes only and should not be viewed as an indicator of performance of Indeed or Recruit. Please refer to the Recruit Holdings investor relations website and regulatory filings in Japan for more detailed information on revenue generation by Recruit’s HR Technology segment.

To calculate fixed-weight wage growth in the LFS, we bucket LFS microdata for each of the 43 occupation groups into three levels of job tenure (6 months or less, 7 to 24 months, and 25 months and over), and recalculate headline average wages into a composition-adjusted measure by holding their respective weights constant at February 2020 levels.