Overview

• Immigration controls led to employment growth outpacing labour force expansion in Q1 2025 for the first time in over two years.
• Average hourly wages rose 3.4% year-over-year in May, matching April’s pace as businesses compete for fewer workers.
• The national unemployment rate ticked up to 7% in May even though total employment remains 0.3% above its year-end 2024 level.
• Ongoing trade uncertainty with the United States is expected to keep hiring demand muted and business investment subdued through the rest of 2025.
• The Conference Board projects unemployment will fall to 6.2% in 2026 and 5.8% in 2027 as tightening markets drive stronger wage growth.