Economic resiliency was a theme in the final innings of 2025. But today’s jobs report is a clear reminder that Canada is not out of the economic woods. Trade tensions are weighing on hiring, and we expect that drag to continue until a ‘deal’ with the U.S. provides some certainty (the CUSMA is scheduled for review this year).

The headline numbers for December: Canadian employment was effectively flat (+8,200 is not statistically significant from zero) last month. With more people looking for work, the unemployment rate rose 0.3 points to 6.8%.

The details were mixed. More full-time jobs offset fewer part-time jobs, and the paltry job gain was driven by health and social assistance and “other services,” which made up for declines in professional and scientific services, accommodation and food, and utilities.

Today’s release comes after a string of reports that pointed to a resilient labour market. We warned last month to not get carried away with the stronger readings, given that forward-looking surveys pointed to soft hiring intentions. Today we were reminded of that.

Note: These numbers are seasonally adjusted for normal hiring swings, for example due to a pick up in holiday shopping.

Alberta’s job streak ends…

Alberta’s job creation streak came to an end in December. After three straight months of 10K+ gains, employment slipped 14K last month. This partly offset the 29K spike in November.

Back to the “don’t get too carried away” point, last month we said we were looking for a rotation into the goods sector (oil and gas, manufacturing, construction) hiring, which tends to anchor broader gains in the province. That didn’t happen, with both goods (-3.8K) and services (-10K) seeing declines last month.

…but Q4 still strong

Alberta lost some steam in December, but it was still a stellar quarter. Q4 employment was up 48.5K from Q3, the province’s strongest showing on record outside of the COVID recovery.

Looking at the longer-term trend, Alberta still maintained its job growth lead over the other provinces. Over the last 12 months, employment is up 2.3% versus 1.1% nationally.

Not a bad year, all things considered

This time last year, the ATB Economics team was frantically running tariff scenarios. At one point (before we learned of CUSMA exemptions) our tariff scenario had employment growth flat and the unemployment rate jumping for the year.

The final tally shows employment rising 2.8% last year in Alberta, outpacing all provinces and the national gain of 1.4%.

As for unemployment, Alberta’s rate averaged 7.2%, a couple ticks higher than 7% in 2024, but still higher than the national average of 6.8%.

Expect more ‘balanced’ labour market conditions this year

Does today’s report change our view of the Alberta labour market? No. We were expecting an eventual pull-back, as the September-November job gains seemed a bit much given the current economic climate.

Our latest forecast has employment in Alberta rising 2.8% this year, and the provincial unemployment rate averaging 6.5%.

Why do we expect the unemployment rate to ease this year? Mainly due to a much smaller increase in the number of people looking for jobs, as opposed to a surge in hiring. Population growth is slowing significantly, and with it will come fewer new labour force entrants.

That said, given stronger economic conditions in Alberta, alongside the housing affordability advantage over B.C. and Ontario, we see interprovincial migration continuing to prop up population growth in Alberta relative to other provinces.

Skills mismatches are also an issue, with pockets of shortages (think construction) in an otherwise ‘loose’ labour market. The year of rebalancing should help match people to jobs to partly address some of these issues.

Not enough for the Bank of Canada to cut

While this jobs report is not exactly flattering, it won’t be enough for the Bank to cut in our view. First, it’s just one month, and the other months have been better than expected. Second, core inflation is still sticky above the Bank’s target. Third, the Bank is already at the low end of its neutral range. We maintain our forecast for the Bank of Canada to hold this year. 

The trivia section will be in The Seven coming out later today.