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Canada faces economic challenges under PM Mark Carney, with only 7,400 jobs added in April 2025 and unemployment at 6.9%.
Canada economic trouble amid trade war.
Canada’s Economy Trouble: Canada, known for its economic strength and natural resources, is facing a tough period under the leadership of new Prime Minister Mark Carney. In April 2025, only 7,400 jobs were added, while the unemployment rate surged to 6.9%, the highest since November 2023.
This slow job growth has raised concerns about economic stagnation, with U.S. tariffs on Canadian exports such as steel, aluminum, and automobiles being a significant factor. The weak job numbers and a growing labor force indicate mounting challenges for Canada’s economic stability amid escalating trade tensions.
Significant Job Losses And Rising Unemployment
Statistics Canada reports that around 1.6 million Canadians are currently unemployed, reflecting significant strain in the labor market. The net addition of 7,400 jobs in April stands in stark contrast to the loss of 32,600 jobs in March, highlighting the economy’s uneven recovery. The unemployment rate increased from 6.7% to 6.9%, surpassing analysts’ expectations of 6.8%.
This troubling trend shows that almost 61% of those unemployed in March remained jobless in April, a 4% increase from the previous year, underscoring the growing difficulties in re-entering the workforce. The employment rate, tracking the working-age population with jobs, fell to 60.8%, the lowest in six months, indicating that job creation is not keeping up with population growth. This mismatch is putting pressure on social services and raising concerns about long-term economic stability.
Unresolved Trade Tensions With The U.S.
The trade war initiated by Donald Trump includes various tariffs on Canadian imports, adversely affecting the Canadian labor market. In response, Canada has imposed retaliatory tariffs on selected U.S. goods. Recently, Carney and Trump met in the Oval Office for initial trade talks. While both leaders claimed progress, no relief from tariffs has been announced yet.
Stagnant Salaries
Despite the bleak outlook, the public sector offered a slight improvement by adding 23,000 jobs (0.5%) in April, mainly due to temporary hires related to the federal election cycle. However, this increase did little to offset stagnation in other areas. Private sector employment remained almost flat, and self-employment saw no significant gains, highlighting the economy’s sluggish momentum. Wage growth also showed no improvement, with average hourly wages for permanent employees rising 3.5% year-over-year, unchanged from March. While this pace matches inflation (around 3%), it does little to boost consumer spending or indicate a healthy labor market.
Bank of Canada Under Pressure
With job growth faltering and trade tensions escalating, economists are predicting monetary policy intervention. The Bank of Canada is widely expected to cut interest rates at its June 2025 meeting, with market odds of a 25-basis-point reduction exceeding 55%, according to currency swap data. This move aims to stimulate borrowing and investment, though analysts caution that rate cuts alone may not fully counter the impact of U.S. tariffs.
Financial markets are already reflecting investor unease, with the Canadian dollar rising marginally by 0.1% to 1.3909 against the U.S. dollar (approximately 71.90 cents), and two-year government bond yields dropping 3.3 basis points to 2.586%, signaling expectations of looser monetary policy.
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