Canada’s Jobs Market Expected to Chug Along Even as Labour Force Shrinks

RBC expects Canada to add roughly 25,000 jobs in April, leaving employment down about 70,000 year-to-date but likely pushing the unemployment rate modestly lower to 6.6% (from 6.7%) and to about 6.3% by year-end. The note highlights that weakness has been concentrated in trade-exposed sectors, permanent layoffs have fallen, and broader measures of unemployment (e.g., R‑8) are aligned with the official rate. A 40% surge in oil prices from the Middle East conflict should boost Canada’s energy surplus, helping narrow the merchandise trade deficit to an estimated -$3.8bn in March (from -$5.7bn). RBC also sees U.S. nonfarm payrolls at about +26,000 in March with the U.S. unemployment rate holding near 4.3%. Market impact: a gradual improvement in Canadian labour and trade metrics is mildly supportive for the Canadian dollar and reduces near‑term downside risk, but the outlook is modest rather than strongly bullish.