Canada’s labour market showed tentative signs of stabilizing in March, with employment rising by a net 14,000 following sharp declines in the first two months of the year, according to Statistics Canada.

The gains were spread across most of the country, with seven provinces adding jobs—led by a sharp gain in Manitoba and solid increases in Quebec— while declines in British Columbia and Ontario weighed on the national total, with Ontario’s jobless rate remaining among the highest in the country.

The unemployment rate held at 6.7%, while the employment rate remained at 60.6%, suggesting hiring has yet to regain momentum.

Employment was essentially flat across job types, with full-time employment edging down slightly (-1,000) while private-sector employment rose by 15,000. Job gains in services and natural resources were offset by declines in finance, real estate and leasing, pointing to a mixed picture across sectors.

Wage growth, however, picked up, with average hourly earnings rising 4.7% year over year—its fastest pace in several months.

What it could mean for the Bank of Canada
The March data doesn’t materially change the Bank of Canada’s near-term outlook.

“For a refreshing change, the employment results were no big surprise in March, and the big-picture take-away is that job growth has been quite modest over the past year—but so, too, has been the growth in the available labour force, holding the unemployment rate steady,” said BMO chief economist Douglas Porter.

“The only really new news here is that wages seemingly popped, which the Bank of Canada will keep an eye on, particularly as it is already on high alert for signs of any spillover from higher energy prices to broader inflation.”

TD economist Andrew Hencic said the broader backdrop remains uncertain, with the economic impact of higher energy prices still working its way through the system. “How long the conflict lasts and energy supplies remain disrupted will determine the size of the inflation shock,” he wrote.

For now, he said, softer demand conditions should help offset some of that pressure, giving the Bank of Canada room to remain on hold while it assesses how the situation evolves.