Full Breakdown
Canada’s Employment Landscape: December 2025 Report
1/10/2026, 8:30:33 PM
Employment Gains Amid Rising Unemployment
In December 2025, Canada’s labor market experienced a modest increase of 8,200 jobs, marking the fourth consecutive month of employment growth. However, the unemployment rate rose to 6.8%, up from 6.5% in November, primarily due to a significant influx of 81,000 new job seekers, the largest monthly increase since late 2024. This surge in the labor force, coupled with the inability of many new entrants to secure employment, led to a notable increase in the number of unemployed individuals by 72,900, the highest monthly rise since August 2022, according to Statistics Canada.
Sector Performance and Job Dynamics
The job gains in December were predominantly in full-time positions, with the health care and social assistance sectors contributing 21,000 jobs and the construction sector adding 11,200 roles. Conversely, part-time employment saw a decline of 42,000 positions. The professional, scientific, and technical services sector lost 18,000 jobs, while the accommodation and food services sector also faced losses. The overall employment landscape indicates that sectors less affected by the ongoing U.S. trade disputes are driving job creation, despite broader economic challenges.
Economic Context and Trade Implications
The rise in unemployment and the modest job gains come amid ongoing trade tensions with the United States, particularly due to tariffs imposed by President Donald Trump on Canadian exports. These tariffs have adversely affected key industries, contributing to a cooling hiring environment. Economists have noted that while the labor market shows some resilience, the overall economic activity is expected to remain subdued in 2026 unless trade conditions improve.
Official Statements & Responses
Doug Porter, Chief Economist at the Bank of Montreal, remarked, “Today’s ho-hum report likely has a better grasp on reality,” suggesting that the previous months' employment gains were overstated. Claire Fan, a senior economist at the Royal Bank of Canada, stated, “December’s modest employment gain and rising unemployment rate reinforce our view that Canada’s labor market recovery is underway but will likely prove choppy.”
Criticism & Opposition
Some economists express concern over the implications of rising unemployment amidst job gains. Andrew Hencic, a senior economist at Toronto-Dominion Bank, noted, “After a string of upside surprises, the Canadian labor market gave back some of its gains in December,” indicating skepticism about the sustainability of recent employment trends.
Conflicting Reports & Gaps
While the overall job growth was reported as 8,200, there were discrepancies in sector performance, with some sources indicating varying job losses in specific industries. Additionally, the participation rate increased to 65.4%, but the exact impact of this rise on the unemployment rate remains a topic of discussion among economists.
What's Next
Looking ahead, the Bank of Canada is expected to maintain its key interest rate at 2.25% for most of 2026, as policymakers assess the economic landscape and the ongoing effects of trade disputes. The next monetary policy report is scheduled for January 28, which will provide further insights into the central bank's outlook on the economy.
In summary, while Canada added jobs in December, the simultaneous rise in unemployment highlights the complexities of the current labor market, influenced by external economic pressures and internal labor dynamics.
