CAD: Gradual improvement expected in labour – RBC

Royal Bank of Canada (RBC) economist Claire Fan notes that Canada lost 18,000 jobs in April, bringing total job losses in 2026 to 112,000, while the unemployment rate rose to 6.9%. Hours worked were flat and participation increased. Rising unemployment is attributed to weak hiring rather than layoffs, with RBC expecting resilient domestic spending to gradually improve labour conditions later this year.

RBC sees hiring weakness but fewer layoffs

"Canada lost 18,000 jobs in April, adding to declines in earlier in the year for a cumulative loss of 112,000 in 2026 to date."

"The unemployment rate ticked back up to 6.9%, matching last April's level. Hours worked remained essentially flat, and the labour force participation rate increased. Critically, and consistent with earlier trends, rising unemployment was driven not by layoffs but by weak hiring."

"Permanent layoffs in Canada continued to decline in April, sitting 10% below their October 2025 peak. Instead, unemployment rose as more workers left their jobs to seek new positions and new labour market entrants struggled to find work."

"We continue to look through near-term volatility, and expect resilient domestic spending from consumers, businesses and governments will support gradual improvements in labour conditions later this year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)