Canada Job Losses Hit Four-Year High as US GDP Growth Is Revised Downward

Canada's economy shed 83,900 jobs in February 2026, the largest monthly decline since January 2022, pushing the unemployment rate to 6.7%, according to data reported by Reuters and the Wall Street Journal. The losses brought the total number of jobs eliminated in the first two months of 2026 to more than 100,000, according to the BBC. Manufacturing, construction, and retail were among the sectors most affected, according to Bloomberg. Prime Minister Mark Carney, who has held office since 2025, is facing mounting economic pressure and has turned to allied governments as the job losses accelerate.

Canada's labor market had shown resilience through much of 2024, but the opening months of 2026 marked a sharp reversal. The February decline of 83,900 jobs was the steepest single-month drop since January 2022, according to web search results citing CBC and the Globe and Mail. The deterioration has been broad-based, spanning multiple industries, with Bloomberg describing the situation as several sectors "bleeding jobs." The scale of losses in just two months has prompted comparisons to earlier periods of economic stress in Canada.

Bloomberg described the Canadian labor data as "very worrisome," with job losses concentrated across multiple industries. Carney has responded by engaging allied governments, though no confirmed details of specific agreements were available in source articles. The unemployment rate rising to 6.7% represents a significant deterioration in labor market conditions. Youth employment was cited among the areas of concentrated losses, according to web search results from the Globe and Mail.

In the United States, fourth-quarter 2025 GDP growth was revised sharply downward to an annualized rate of 0.7%, from an initial estimate of 1.4%, Reuters reported on March 13, 2026. A record 43-day government shutdown and lower consumer spending contributed to the downward revision, according to source articles. The revision came alongside data showing the core PCE Price Index rose 3.1% in January 2026, in line with expectations but remaining elevated. Markets rallied following the data release, according to Reuters, though analysts noted the inflation reading would likely delay Federal Reserve interest rate cuts. The Wall Street Journal described underlying inflation as "stubborn" by the Fed's preferred metric.

The combination of weak growth and persistent inflation has complicated the outlook for both the Federal Reserve and broader North American economic conditions. The U.S.-Israeli war with Iran was also cited in source articles as a factor clouding the economic outlook and affecting oil prices. The core PCE reading of 3.1% followed a revised 3.0% rise in the prior period, according to web search results. With GDP growth at 0.7% and inflation above target, markets adjusted expectations for the timing of any Fed rate reductions. The parallel deterioration in Canadian and U.S. economic data in the same reporting period has drawn attention to the interconnected pressures facing both economies.