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Canada created just 8,200 new jobs in December, while the unemployment rate rose as more people searched for work, Statistics Canada said on Friday.
The unemployment rate hit 6.8 per cent in December, up from 6.5 per cent in November.
Full-time employment rose by 50,200 in December, while part-time employment fell by 42,000.
Analysts polled by Reuters had expected a net loss of 5,000 positions and the jobless rate to edge up to 6.6 per cent.
The December results come after three months of outsized gains in employment. The economy had added a total of 181,000 new jobs from September through November, in contrast to almost no change in the first eight months of 2025, when U.S. tariffs and trade uncertainty choked hiring.
Employment in health care and social assistance in December increased by 21,000, while the professional, scientific and technical services sector posted a drop of about 18,000 positions, the first decrease since August. The trade-sensitive manufacturing sector added 4,300 jobs in December.
Job gains were higher for those 55 and over, but the job market remained difficult for young Canadians, as youth unemployment for those aged 15 to 24 rose by half a percentage point to 13.3. That figure was down from 14.7 per cent recorded in September, a 15-year high outside the COVID-19 pandemic.
Average hourly wages rose 3.4 per cent year-over-year in December, cooling from 3.6 per cent in November.
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Statistics Canada said the labour market faced headwinds from U.S. tariffs through much of 2025, but conditions improved for job seekers toward the end of the year.
Douglas Porter, BMO’s chief economist, said the December figures bring job gains back to a more “realistic place.”
“Following massive swings in the prior six months (mostly on the strong side of the ledger), today’s ho-hum report likely has a better grasp on reality,” Porter said in a note.
He said the moderate numbers wouldn’t be of much interest to the Bank of Canada when deciding on any interest-rate changes, and supported his prediction that the bank will hold rates.
Friday’s jobs report marks the Bank of Canada’s last look at the state of the labour market before its first interest-rate decision of the year later this month.
