Why December’s growing unemployment signals a resilient talent pool

The Canadian labour market concluded 2025 with a performance that suggests a gradual, albeit uneven, path toward recovery. The Labour Force Survey for December, released by Statistics Canada, revealed a modest employment gain of 8,000 positions. While this figure represents a significant cooling compared to the robust addition of 181,000 jobs over the preceding three months, it indicates a market that is stabilizing rather than retreating. This period of transition provides a complex backdrop for the staffing and recruitment industry, characterized by a shift in participation rates and sectoral realignments.

The most visible shift in the December report was the rise in the national unemployment rate from 6.5% to 6.8%. However, an analysis of the underlying data suggests this increase was not the result of widespread job losses or a surge in layoffs. Instead, it was driven by a sharp rise in the labour force participation rate, which climbed from 65.1% to 65.4%. This movement indicates that more Canadians are actively seeking work, reflecting renewed confidence or changing economic circumstances among the population. Because the economy did not immediately absorb all these new entrants, the unemployment rate ticked upward. For staffing professionals, this translates to a larger pool of active candidates, though the absorption of this talent remains a gradual process.  

Sectoral performance in December highlighted a divide between public-facing roles and professional services. Growth was concentrated in public sectors, with educational services and health care adding 11,000 and 21,000 jobs respectively. Conversely, professional, scientific, and technical services (including accounting, legal, and engineering roles) saw a contraction of 18,000 positions, while finance and insurance sectors shed 10,000 jobs. These losses contribute to a "low-hiring, low-firing" environment where permanent layoffs remain historically stable, yet new requisition volumes in white-collar sectors face short-term headwinds.

The trade-exposed sectors, particularly manufacturing, transport, and warehousing, showed signs of stabilization after a difficult summer. Combined employment in these areas remained flat month-over-month but finished the year 22,000 positions higher than in December 2024. This stability is a positive signal for industrial staffing, suggesting that the volatility caused by international trade uncertainty throughout 2025 may be beginning to subside.  

Geographically, the impact of the December data was felt most acutely in Ontario, where the unemployment rate rose 0.6 percentage points to 7.9%. This figure sits well above the national average and reflects a broader trend of cooling in Canada’s largest provincial economy. Despite this regional soft spot, nearly all provinces ended the year with higher employment levels than they held at the close of 2024, illustrating the fundamental resilience of the national market despite the year's various economic pressures.