Mark Carney in trouble: Nearly 1.6 million out of job in Canada, one of the largest and richest countries in the world, 30,000-plus job cuts in April

It appears to be Tough-Tough time for Canada's new Prime Minister Mark Carney as unemployment soars and job cuts rise. Going by the numbers, a global economic powerhouse known for its vast natural resources and high living standards, Canada added a mere 7,400 jobs in April 2025. The unemployment rate surged to 6.9% -- the highest since November 2023. This lackluster performance in one of the world’s richest nations has sparked concerns about economic stagnation, with the U.S. tariffs on key Canadian exports like steel, aluminum, and automobiles cited as a major culprit. The weak job numbers, coupled with a growing labour force, signal mounting challenges for Canada’s economic resilience amid escalating trade tensions.According to Statistics Canada, approximately 1.6 million Canadians are now unemployed, with the labor market showing significant strain. The 7,400 net jobs added in April, 2025 pale in comparison to March’s loss of 32,600 jobs, underscoring the economy’s uneven recovery. The unemployment rate, which climbed from 6.7% to 6.9%, exceeded analysts’ forecasts of 6.8%. This marks a troubling trend, as nearly 61% of those unemployed in March remained jobless in April, a 4% increase from the previous year, highlighting growing difficulties in re-entering the workforce.The employment rate, which tracks the proportion of the working-age population with jobs, fell to 60.8%, the lowest in six months and down 0.2 percentage points from March. This decline reflects a broader issue: job creation is failing to keep pace with Canada’s population growth, which, despite recently slowing, continues to outstrip hiring. This mismatch is putting pressure on social services and raising concerns about long-term economic stability.The manufacturing sector bore the brunt of April’s job losses, shedding 31,000 positions in a single month. Statistics Canada directly linked this decline to US tariffs imposed under President Donald Trump’s trade policies, which have targeted Canadian steel, aluminum, and, more recently, automobiles. These tariffs have disrupted supply chains and dampened demand for Canadian exports, which account for roughly 75% of the country’s total trade, with the US as its largest partner. Beyond manufacturing, retail and wholesale trade sectors also reported job losses, reflecting broader economic unease. Trump's trade war has includes a range of tariffs on Canadian imports that are causing pain in the Canadian labour market. Canada too has imposed retaliatory tariffs on targeted US goods. Both Carney and Donald Trump met in the Oval Office recently for initial talks on the future of bilateral trade. Both leaders said that the talks produced progress, but no tariff relief has been announced as yet.Despite the gloomy outlook, the public sector are said to offer a small bright spot, adding 23,000 jobs (0.5%) in April, largely driven by temporary hires tied to the federal election cycle. However, this uptick did little to offset stagnation elsewhere. Private sector employment remained nearly flat, and self-employment saw no significant gains, further underscoring the economy’s sluggish momentum.Wage growth, another key indicator, showed no improvement. Average hourly wages for permanent employees rose 3.5% year-over-year, unchanged from March. While this pace keeps up with inflation (currently around 3%), it does little to boost consumer spending or signal robust labor market health.With job growth faltering and trade tensions escalating, economists are increasingly betting on monetary policy intervention. The Bank of Canada is now widely expected to cut interest rates at its June 2025 meeting, with market odds for a 25-basis-point reduction exceeding 55%, according to currency swap data. Such a move would aim to stimulate borrowing and investment, though analysts warn that rate cuts alone may not fully counter the impact of U.S. tariffs.Financial markets are already reflecting investor unease. The Canadian dollar rose marginally by 0.1% to 1.3909 against the U.S. dollar (approximately 71.90 cents), while two-year government bond yields dropped 3.3 basis points to 2.586%, signaling expectations of looser monetary policy.Canada’s economic challenges extend beyond the labor market. The country’s reliance on resource exports, particularly oil and gas, has made it vulnerable to global commodity price fluctuations. Recent declines in oil prices, coupled with U.S. tariffs, have squeezed corporate profits, leading to hiring freezes in some sectors. Additionally, high household debt levels—among the highest in the G7—limit consumers’ ability to drive economic growth through spending.The slowdown is also raising alarms about inequality. Youth unemployment (ages 15–24) rose to 13.2% in April, nearly double the national average, while long-term unemployment (jobless for 27 weeks or more) increased by 2.1% year-over-year. These trends could exacerbate social tensions and strain public resources if left unaddressed.