OTTAWA – Statistics Canada is preparing to release the employment figures for January 2026, which are highly anticipated by economists and market analysts. A recent Reuters poll indicates that employers are expected to have added approximately 7,000 jobs during the first month of the year. This modest increase is projected to maintain the unemployment rate at 6.8 percent, consistent with the levels seen in the prior month.

Contrastingly, economists from the Royal Bank of Canada (RBC) predict a different outcome, forecasting a decline of 10,000 jobs in January. This anticipated decrease reflects a correction from the strong employment gains observed in the latter months of 2025. Despite this expected job loss, RBC's economists predict that the unemployment rate will dip to 6.7 percent. They attribute this potential decline to a shrinking labor pool, as fewer individuals are available for work due to various economic factors.

Bank of Canada Governor Tiff Macklem recently addressed the challenges in the labor market, highlighting an "uneven" recovery anticipated during the year. He pointed out that while some sectors and occupations may experience job growth, others could face significant hurdles. This commentary underscores the complexity and variability of the economic landscape, emphasizing the need for sector-specific analysis to understand hiring trends.

RBC's economists remain optimistic about the hiring environment despite their job loss forecast for January. They believe that stability on the trade front could lead to a rebound in overall hiring demand. This rebound is expected to contribute to a gradual decrease in the unemployment rate, projecting it could drop to 6.3 percent by the end of 2026. Factors influencing this positive outlook include increased trade activity and improvements in economic conditions that stimulate job creation across various industries.

Overall, the jobs report set to be released by Statistics Canada carries significant implications for the Canadian economy and labor market. The divergence in job growth forecasts from various financial institutions reflects a broader uncertainty regarding labor market recovery, emphasizing the need for analysts and policymakers to closely monitor employment trends as they develop throughout the year.