WASHINGTON, D.C. — If you listen to U.S. President Donald Trump discuss American jobs, see headlines about a fabled “soft landing” in the U.S., or hear Prime Minister Mark Carney talk about creating jobs and reducing unemployment, you might think North America’s labour markets are healthy.
The White House points to job creation and a shrinking federal workforce as proof of its re-industrialization policies and economic agenda working. It celebrates hundreds of thousands of new private-sector jobs and the millions of positions it claims to have saved or created since Trump returned to office. Yet, recent revisions to last year’s employment data reflect far weaker job creation.
Still, according to the White House, the job market is growing like gangbusters.
“Today’s blockbuster, expectation-shattering jobs report proves that President Trump’s economic agenda continues to pay off,” reads a recent statement from Press Secretary Kush Desai. “The unemployment rate fell and private sector job growth remains robust — particularly for specialty trade construction jobs as the trillions in investments secured by the President pour into American manufacturing.”
Carney has also touted job creation, falling unemployment, and wage growth, but employment surveys draw far different conclusions on the health of the Canadian labour market.
Meanwhile, unemployment rates have eased slightly in both countries, but broader measures that include discouraged workers and those stuck in part-time jobs for economic reasons reflect that many Americans and Canadians are struggling to find stable, full-time jobs.
So, beyond the spin, reality reveals a shakier labour market with weaker-than-claimed job growth, millions stuck in underemployment, and Trump’s tariffs and the looming CUSMA review, which threaten to make it all worse.
Numbers vs. reality
The White House says Trump’s tariffs and re-industrialization push has led to the creation of 615,000 private sector jobs since he took office again — and the lowest level of federal employment since 1966. It also claims to have saved or created nearly six million jobs since Trump’s return to office.
But 2025’s Bureau of Labor Statistics data, which had reflected 584,000 non-farm job gains for last year, has been revised down to just 181,000 jobs, a 70 per cent decrease.
Unemployment is officially at 4.3 per cent, down slightly, as of January, but the figure is much higher — 8.7 per cent — if it includes discouraged workers and those seeking part-time jobs for economic reasons.
Trump’s jobs story is all a “hoax,” said Gary Hufbauer, senior fellow at the Peterson Institute for International Economics.
Between 68,000 and 108,000 manufacturing jobs were lost in the U.S. last year, depending on the source and analysis, exposing that tariffs have not delivered the broad re-industrialization the president promised.
Even the U.S. steel industry, Hufbauer said, has not added workers, despite benefiting from tariffs.
“(The industry) is automating more while prices are up and it’s a beneficiary of these tariffs, but it’s not increasing employment, so no, I don’t see the big surge in manufacturing employment that (Trump) pretends that he sees.”
Richard Stern, VP of the Plymouth Institute for Free Enterprise at Advancing American Freedom, said most of 2025’s job growth happened before the tariffs were imposed. Now, however, “job creation is essentially flat … and that makes perfect sense because the tariffs have been a massive tax on U.S. producers.”
Stern noted that Trump’s deregulations and tax cuts are good in that they are leaving more money with families and firms, boosting energy output, and spurring production.
But tariffs “are about half the size of the tax cuts,” he caveated, which erases much of their benefit.
Headlines last month did point to an additional 130,000 jobs, but economists warn that this number, like most BLS figures, is likely to be revised downward.
And the U.S. labour market may be even weaker than the revised numbers imply, thanks to immigration policies.
Cuts in immigration and increased deportations, Hufbauer said, mean you “couldn’t expect a very big increase in employment” because many workers in the construction, home repair, and agricultural sectors have simply left.
Job openings and unemployment are roughly balanced, but the openings and job seekers do not match by skill or geography. The surge in January was mostly in health care, for example, but that’s hard to replicate because of skills and location mismatches.
“You don’t take people who have been doing retail trade, for example, and put them in healthcare very easily, or very quickly,” he said. “In the little village where I live in New Mexico, there’s a shortage of healthcare workers and an abundance of other workers, and they’re not moving from one slot to the other.”
Hufbauer expects this mismatching trend to worsen and for U.S. unemployment to tick up towards 5 per cent this year — that would be a 10-year high — with the labour market just “stumbling along.”
But other indicators point to Americans’ financial strain. Mortgage and credit-card delinquencies are rising – the latter is at its worst rate since 2011 – and the University of Michigan’s Index of Consumer Sentiment shows discouraging confidence figures.
“People don’t have a very bright outlook on the future,” he added.
But if the tariffs are stunting job growth in the U.S., it’s bound to be worse for Canada, despite political spin.
North of the border
“Since we were elected, the Canadian economy has created over 180,000 jobs,” Carney claimed in late December. “The unemployment rate has fallen sharply. Wages have grown faster than inflation every single month.”
But Canadian employment surveys, much like the pre-revised BLS numbers in the U.S., are sending misleading signals.
The Labour Force Survey (LFS), for example, points to 310,000 new jobs year over year as of November, but the Survey of Employment, Payrolls, and Hours (SEPH) only has 47,000 jobs for that period. For the six months leading up to November, the difference is even more stark: 198,000 jobs added, per the LFS, versus 5,000 jobs lost, according to SEPH.
So, which one’s right?
“The household survey (LFS) is probably overstating it,” said Tony Stillo, director of Canada Economics at Oxford Economics. “The truth is closer to the payroll survey showing the job market is not quite as healthy as it appears.”
Avery Shenfeld, managing director and chief economist of CIBC Capital Markets, echoed this sentiment, noting that LFS may overstate jobs due to lagged population adjustments amid slowing immigration, much like in the U.S.
“We’re not seeing the business sector at least do any significant hiring in the past year,” he said.
Unemployment did fall in January to 6.5 per cent, but that, economists explain, was due to fewer job seekers compared to the number of job losses – meaning enough people stopped looking for work, driving down the rate. The rate that includes unemployed, discouraged, and involuntary part-time workers, meanwhile, is around 11 per cent.
Shenfeld noted that manufacturing employment fell 2.7 per cent year-over-year, referring to it as notable given how small the sector is.
So why the spin from Ottawa about strength in job numbers?
“I guess it depends on what you were expecting to see,” said Shenfeld. “We didn’t plunge into a deep recession, and there was certainly some fear of that when Trump was threatening a 25 per cent tariff on all our exports.”
“A recession did look like a likely outcome that we’ve so far managed to skate by.”
But he also said he didn’t think Carney was saying the economy is strong – and instead pointed to Ottawa’s planned stimulus to promote capital projects and add money to consumers’ pocketbooks with fatter checks this spring.
For the capital projects, Shenfeld said, the hope is to bring new companies or expansions’ timelines forward with government help. “Sooner could be 2027 instead of 2029 or 2030,” he noted.
“Big projects take time to get underway,” he said, noting how there is “no easy, quick fix for the dent that Canada has faced on the trade side.”
Oxford Economics has forecasted growth on an annual average basis at 1.1 per cent this year and 2.1 per cent next year, presuming the Canada-U.S.-Mexico Agreement (CUSMA) survives the review this summer, and it predicts that unemployment will top seven per cent before dropping quickly due to demographic changes. CIBC, meanwhile, believes GDP will grow at 1.3 per cent, again assuming CUSMA is extended.
But what if CUSMA isn’t extended?
Canada’s worst fear
“If the deal were to die … our estimate is the growth this year would be 0.7 per cent, rather than 1.1, so four tenths lower, and next year, it’d only be a half a per cent,” Stillo explained.
If that happens, “we’d likely see the Canadian economy fall into a recession late this year and into early 2027,” he added.
Canada needs CUSMA extended, or for the U.S. Supreme Court to deem the president’s imposition of tariffs under the International Emergency Economic Powers Act illegal.
If the trade deal is extended, then the high court ruling won’t matter as much for Canada. But if the deal falls apart, Canadian exporters would then face crushing IEEPA “fentanyl” tariffs – in addition to the Section 232 tariffs on steel, aluminum, and lumber – which would be disastrous for the economy.
“If we saw the U.S. withdraw from CUSMA, and the Supreme Court allows this fentanyl tariff to stay in place,” said Shenfeld, “that would be the adverse outcome that Canada fears the most.”
National Post
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