Canada’s unemployment rate rose to 6.8 per cent in December, up from 6.5 per cent the month before, as the number of Canadians looking for work spiked, outpacing modest

job growth. The Canadian economy added 8,200 jobs for the month, down from the 54,000 jobs gained in November, Statistics Canada said on Friday. Full-time employment rose by 50,000 while part-time employment declined by 42,000, offsetting some of the gains in October and November.

Over the past 12 months, growth in part-time work has outpaced growth in full-time work, with the number of part-time jobs up 2.6 per cent on the year and full-time jobs up 0.7 per cent.

Hiring was up in healthcare and social assistance, but there were job losses in professional, scientific and technical services and accommodation and food services. There was little change in the number of people employed in the public and private sectors.

The number of unemployed Canadians rose by 73,000 to 1.6 million in December.

Though the employment rate held steady at 60.9 per cent, the participation rate — the proportion of the population aged 15 and up who are employed or looking for work — rose by 0.3 percentage points to 65.4 per cent, helped to drive up the unemployment rate.

The youth unemployment rate increased to 13.3 per cent last month, up from 12.8 per cent in November,  and employment declined by 27,000 among people aged 15 to 24. Labour conditions for youth had shown some improvement in October and November, with employment rising by 70,000 and the jobless rate falling 1.9 percentage points during that period.

Average hourly wages increased by 3.4 per cent in December, down from the 3.7 per cent increase in November.

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The Bank of Canada held its policy rate at 2.25 per cent at its last rate decision in December, citing a more resilient economy and contained inflationary pressures amid U.S. tariffs. The central bank said the job market in trade-affected sectors has remained weak and it expects hiring intentions in the overall economy to remain muted.

“Despite volatility in the unemployment rate and the pickup in job growth in late 2025, it’s clear labour market slack persists,” said Oxford Economics economists Tony Stillo and Michael Davenport, in a note. “We expect layoffs in early 2026 as the economy struggles to grow amid ongoing trade policy uncertainty, U.S. tariffs, and weak domestic demand.”

Stillo and Davenport forecast that the jobless rate will briefly rise above seven per cent in 2026, before slipping back down due to shrinking population growth and modest job gains.

Toronto-Dominion Bank senior economist Andrew Hencic said the Bank of Canada is likely to look through this jobs report and remain on pause for 2026.

“This report is unlikely to move the needle for the Bank of Canada,” he said, in a note. “There is still slack in the labour market, but uncertainty about the supply side of the economy and the risk to inflation means they are unlikely to tip the policy rate into accommodative territory.”