Scotiabank Previews This Week's Jobs Report in Canada

10:11 AM EDT, 03/31/2025 (MT Newswires) -- Canada updates job market readings for March on Friday in its Labour Force Survey (LFS), said Scotiabank.

Unlike the United States, this is the last set of job market signals before the Bank of Canada's next decision on April 16, which is presently priced at less than one-in-three odds of a cut, noted Scotiabank. Those odds will also be informed by U.S. tariff announcements and interpreted effects this week, another consumer price index report the day before the April decision, and the BoC's consumer and business surveys on April 7.

The bank has gone with a gain of 25,000 jobs in March and a slightly lower unemployment rate of 6.5%. Being a household survey, there is a lot of statistical noise as indicated by a 95% confidence interval of more or less 57,000 around estimated monthly job changes.

One motivating reason for the estimate is the weather, stated Scotiabank. February was a bad month by way of more snow and colder temperatures than usual. There was a steep increase in hours worked that were lost due to the weather in February.

Workers who may have been out of the job market temporarily and could return, and hours worked could rebound in March. If so, then a gain in hours worked could be a plus for March gross domestic product that would end Q1 on a solid note and offer some momentum into Q2 by way of the effects on GDP math, pointed out the bank.

There are precious few other signals to go by in Canada. The CFIB indicates that hiring plans among small businesses over the next 3three to four months have cooled, although that doesn't necessarily speak to what happened to hiring in March. 'Indeed' job postings have recently trended a little lower.

The Canadian labor market has become more balanced as it has been restored between job vacancy rates and the unemployment rate.

Next up are seasonal influences, added the bank. March normally posts a job gain in seasonally unadjusted terms. Offsetting this may be another lower-than-normal seasonal adjustment factor based on the fact that all of the lowest seasonally adjusted factors for March employment have been in the years leading up to the pandemic and especially the years following.

As for trade tensions, it may be too early to expect reduced hiring, according to Scotiabank. Trend job growth slowed the last time Canada and the U.S. went head-to-head on trade tensions in 2018-19 and there was significant volatility with some declines mixed in, but on balance, employment grew through that period. Employment was up by almost 570,000 jobs by the end of 2019 compared with the end of 2017.

Today is a much bigger risk given the magnitude of U.S. "belligerence," said the bank.

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