Don’t worry about these bad unemployment figures, RBC says

Royal Bank of Canada senior economist Claire Fan said in a May 8 report that Canada’s unemployment rate rose in April, but the underlying details were less alarming than the headline suggested.

Canada lost 18,000 jobs in April, bringing cumulative employment losses to 112,000 so far in 2026. The unemployment rate rose to 6.9% from 6.7%, matching its level from April 2025.

Fan said the increase was driven mainly by weak hiring rather than layoffs. Permanent layoffs continued to decline and were 10% below their October 2025 peak, while more workers left jobs to seek new positions and new labour market entrants struggled to find work.

Employment losses were concentrated in full-time work and goods-producing industries, led by construction, which shed 16,000 jobs. Manufacturing employment, a tariff-exposed sector, was little changed. Services added jobs overall, helped by business, building and support services and health care.

Health care and social assistance remained a major source of strength, adding 119,000 jobs year-over-year. Excluding that sector, employment was down 52,000 from a year earlier.

Fan said RBC continues to look through near-term volatility and expects resilient spending by consumers, businesses and governments to support gradual labour market improvement later this year.

Hours worked were essentially flat in April, while wage growth returned to a more normal 0.2% monthly pace. Year-over-year wage growth remained elevated at 4.5% because of stronger gains earlier in the year.

By province, Quebec led the decline with 43,000 jobs lost, bringing its 2026 employment losses to 91,000. Ontario added 42,000 jobs, though that only partly offset its year-to-date decline.

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