The Canadian labor market continued its "weak start" to 2026 in April, with a third decline in employment within the first four months of the year, seeing the unemployment rate rise further, said CIBC after Friday's Labour Force Survey (LFS).
The 18,000 decline in jobs came against consensus expectations for a 10,000 increase and, combined with a slight uptick in participation, resulted in a rise in the unemployment rate to 6.9%, noted the bank.
The unemployment rate increased most for young people aged 15-24, but also continued to drift higher for core-aged (25-54) workers. By sector, information, culture & recreation saw the largest decline in employment on the month, and by class of worker, the reduction was driven wholly by full-time, or 47,000 lower, and by public sector paid employment, down 10,000.
Wage growth for permanent employees decelerated to 4.8% year over year, from 5.1% in the prior month, but remained higher than its 2025 average, pointed out CIBC.
Statistics Canada noted that higher wage inflation so far this year has largely been due to compositional factors, such as a smaller proportion of workers with shorter job tenures.
For the Bank of Canada, evidence that slack within the labor market is, if anything, increasing rather than reducing, should limit the ability for the oil price shock to spread into wider inflationary pressure, stated CIBC.
The bank continues to see the BoC holding interest rates at their current level throughout 2026.