Canada’s economy lost 84,000 jobs in February, unemployment rate ticked up to 6.7%

Canada’s economy lost 84,000 jobs in February while the unemployment rate edged up to 6.7 per cent, Statistics Canada said on Friday, a setback for the labour market and one of the worst monthly job losses seen in years outside of the pandemic.

The decline in employment was largely driven by a drop in full-time and private sector jobs, the latter offsetting a short period of growth seen earlier in the fall.

Employment mostly fell in the goods and services-producing industries, with 18,000 jobs lost in wholesale and retail trade, 12,000 lost in construction and 9,200 lost in manufacturing. Men aged 25 to 54 and young people aged 15 to 24 were worst impacted by the drop.

Several indicators were more or less unchanged from the same time last year, including the unemployment rate (which sat at 6.6 per cent in Feb. 2025), the employment rate and the number of people working full-time or part-time.

The participation rate (that is, the number of people who had a job or were looking for one), fell by 0.1 percentage points to 64.9 per cent in February. Average hourly wages rose 3.9 per cent, or $1.42, for a total of $37.56 an hour compared to the same period last year.

Katherine Judge, executive director and senior economist at CIBC Capital Markets, said the labour market took a “worrisome turn” in February, particularly with the loss of full-time, private sector roles.

The drop in jobs and the uptick in unemployment was in contrast to analyst expectations that the labour market would gain 10,000 jobs, she wrote, and that the unemployment rate would rise at a slower pace than it did.

“This is clearly a very worrisome report for the [Bank of Canada] that shows that labour market slack has increased and activity is frozen amidst trade uncertainty,” said Judge.

The central bank has one more major economic data release to look at — Monday’s inflation numbers — before it makes its next interest rate decision next Wednesday. As of Friday afternoon, most economists were predicting the Bank would hold rates where they are.

‘Exceptionally weak’ report, says economist

The unemployment rate rose or was unchanged in nine of the 13 provinces and territories last month, according to Statistics Canada.

The youth unemployment rate for people aged 15 to 24 ticked up to 14.1 per cent, another blow to a cohort that has struggled with a high jobless rate over the last two years. The rates for racialized youth were “notably higher” compared with non-racialized, non-Indigenous youth, the data agency noted.

“The fact that the unemployment rate is almost unchanged from a year ago does make me a little bit calmer about this result,” said Douglas Porter, chief economist at the Bank of Montreal, in an interview with CBC News.

“But still, I think the overriding message here is it was very weak at the start of the year. We’ve seen almost no job growth whatsoever over the last 12 months. And that’s not a positive for the economy. “

Carney says U.S. trade uncertainty ‘causing big adjustments’ as Canada reports February job losses

At a news conference in Norway on Friday, Prime Minister Mark Carney was asked about Statistics Canada’s most recent report indicating that the economy lost 84,000 jobs in February while the unemployment rate edged up to 6.7 per cent.

The report being “exceptionally weak” should quash any talk about interest rate hikes, which markets had been pricing in for the second half of the year, said Porter.

“I actually think the bank should be actively considering the possibility of rate cuts if this kind of weakness in the economy continues in the months ahead,” he said.

“Beyond the fact that consumers are going to be burdened with the hit to disposable income from higher oil prices, we’ve still got the uncertainty of the USMCA, and on top of that we’ve got no job growth. I do not see the Bank of Canada hiking in that environment.”