Canada’s unemployment rate held steady at 6.7 per cent in March as the economy added just

14,000 jobs and employment levels remained unchanged from February, Statistics Canada said Friday.

The country’s employment rate held at 60.6 per cent between February and March.

The participation rate — the proportion of the population aged 15 and up who were employed or looking for work — was also unchanged from February at 64.9 per cent, but down 0.4 percentage points from a year ago.

Statistics Canada said 15.2 per cent of people who were unemployed in February found work in March, slightly above the 14.7 per cent recorded a year earlier but below the pre-pandemic average of 19.1 per cent for the same months between 2017-19.

“This indicates that higher unemployment rates relative to the pre-pandemic period continue to be mostly driven by slower hirings, rather than by increased layoffs,” the agency said.

Andrew Grantham, executive director and senior economist at Canadian Imperial Bank of Commerce, said the labour market appears to be in a “holding pattern” with underlying employment trends not strong enough to further bring down the unemployment rate.

“Given continued uncertainty over trade with the United States and with energy prices adding to company costs, hiring is likely to remain cautious in the near term and we forecast only a very marginal improvement in the unemployment rate before year-end, before hopefully seeing greater progress in 2027,” Grantham said in a note.

Finance, insurance, real estate, rental and leasing had the most job losses, with 11,000 fewer people working in the sector. “Other services,” which includes repair and maintenance, had the largest gain, adding 15,000 jobs last month, while the natural resources sector added 10,000 jobs.

“The one positive was that around half of the above-average 10,000 rise in natural resources came from Alberta, which may reflect firms taking on more staff on the back of surging oil prices,” Bradley Saunders, North America economist at Capital Economics Ltd., said in a note.

The youth unemployment rate ticked down to 13.8 per cent in March after jumping to 14.1 per cent in February.

Average hourly wages were up 4.7 per cent year-over-year in March, up from the 3.9 increase in February and the highest growth rate since October 2024. Statistics Canada said this was “partly due to a shift in the composition of employment” and that average hourly wages grew 3.6 per cent on a year-over-year basis when using a method “that holds constant the composition of employees by occupation and job tenure.”

The biggest decline in employment over the past 12 months has been in manufacturing, which shed 44,000 jobs. The biggest gains were in health care and social assistance, which added 94,000 jobs.

Andrew Hencic, director and senior economist at Toronto-Dominion Bank, said in a note that the latest numbers showcase the “lack of dynamism” in Canada’s labour market.

“The unemployment rate remains elevated, with the lack of hiring showcasing the general apprehension in the economy,” he said. “With the economy continuing to progress in fits and starts, and uncertainty sky-high, the outlook is for subdued job growth and a steady unemployment rate.”

Hencic said the outlook is “fraught” as the energy shock resulting from the Iran war is starting to be felt in the economy.

“How long the conflict lasts and energy supplies remain disrupted will determine the size of the inflation shock,” he said. “For now, weak demand conditions should provide some offset to inflationary pass-through, allowing the Bank of Canada to stay on the sidelines and wait to see how things play out.”

Grantham from CIBC said a continued elevated unemployment rate should decelerate wage inflation and also “limit the possibility that the current energy price spike turns into a broader inflationary problem.”

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