Labour market sends mixed signals as hiring demand rises despite payroll job losses
Canada’s labour market closed out 2025 with conflicting momentum, as payroll employment slipped across a wide range of industries while employers posted a notable increase in available positions, according to new data from Statistics Canada.
The Survey of Employment, Payrolls and Hours found the number of employees receiving pay and benefits fell by 35,400 in December, representing a 0.2% monthly decline following little change in November. On an annual basis, payroll employment was down 28,300 positions compared with December 2024.
Losses were recorded in nine of 20 sectors during the month, led by manufacturing, wholesale trade, transportation and warehousing, accommodation and food services, and educational services.
Only construction and health care and social assistance posted employment gains, partially offsetting broader declines.
Manufacturing remained a key drag on payroll employment, shedding 7,400 positions in December. Job losses were spread across nearly half of the industry’s subsectors, extending a pattern of weakness seen throughout much of 2025.
Transportation and warehousing payrolls also declined, driven largely by fewer workers in truck transportation. Despite the monthly drop, the sector maintained year-over-year growth supported by hiring among courier services, warehousing operations and passenger transit.
Wholesale trade employment continued a downward trend that began in late 2024, with cumulative losses totalling 17,600 positions since September of that year. Machinery and equipment wholesalers accounted for a significant portion of the contraction.
Accommodation and food services employment also moved lower, continuing a decline that began earlier in the fall. Restaurants represented the bulk of the sector’s annual losses.
Construction stood out as a rare area of strength. Payroll employment increased modestly in December, supported by growth among specialty trade contractors and infrastructure-related work, including highway and heavy civil engineering projects. The industry has now recorded six consecutive months of gains through the latter half of 2025.
Health care and social assistance also added workers, though hiring growth remained relatively modest.
Even as payroll employment weakened, labour demand strengthened.
Job vacancies rose by 23,700 positions in December to reach 514,600 openings nationwide, a 4.8% increase from November and the highest level recorded since March 2025.
Despite the monthly increase, vacancies remained below year-earlier levels, declining 3.8% compared with December 2024.
The national job vacancy rate climbed to 2.9%, up from 2.7% in November.
There were three unemployed individuals for every available job in December, unchanged from the previous month but slightly higher than a year earlier, reflecting both rising unemployment and fewer openings than in late 2024.
Accommodation and food services, construction, manufacturing and education recorded some of the largest monthly increases in vacancies.
Regionally, British Columbia and Ontario saw notable growth in open positions, while Manitoba was the only province to report a decline during the month.
Average weekly earnings continued to edge higher but at a slower annual pace. Employees earned an average of $1,316 per week in December, up 1.9% from a year earlier following stronger 2.3% growth in November. Earnings were largely unchanged month over month.
Average weekly hours worked slipped slightly to 33.2 hours, declining compared with both November and the same period last year.
Statistics Canada noted that earnings trends may reflect a mix of wage adjustments, shifts in workforce composition and variations in hours worked rather than wage growth alone.
Taken together, the data suggest employers entered 2026 cautiously, trimming payrolls in several industries even as hiring demand resurfaced in others.
