Last Friday, Statistics Canada reported that Canada’s economy lost jobs in January, ending four consecutive months of job gains. Canada’s labour market has come under the spotlight as US tariffs weigh on several key sectors of Canada’s economy. Mid-2025, labour market conditions deteriorated and trade uncertainty heightened. However, late in the year, the job market appeared to stabilize as the economy added jobs and the labour market came down. January’s report gave mixed signals, which left investors unsure how this may impact the Bank of Canada’s (BoC) monetary policy decisions.

• Canada’s economy lost 24,800 jobs in January, which was the first month of job losses since August. January’s decline was driven by 69,700 job losses in the part-time sector. The decline in the part-time sector was partially offset by 44,900 job additions in the full-time sector.
• Manufacturing and educational services lost the most jobs over the month. Conversely, the culture and recreation industry added jobs in January.
• Approximately 94,000 individuals left the job market as they stopped searching for work, pushing the participation rate lower to 65.0%, which has been its lowest level since May 2021.
• With the overall number of unemployed persons declining and a lower participation rate, Canada’s unemployment rate fell to 6.5%. This matched November 2025 as the lowest unemployment rate since September 2024.

Despite the job losses in January, the report was largely positive. Several market participants noted that the part-time job losses resulted from an increase in part-time hiring over the holiday season. Furthermore, the unemployment rate came down, which may reduce any concerns from the BoC. Canada’s job market remains relatively stable, representative of the overall economy, which has proved its resiliency despite being challenged with trade disruptions with the US.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.