Royal Bank of Canada analysts review Canada’s September labour report, the first full dataset since U.S. Section 338 tariffs took effect. They estimate around 0.4% of Canada’s GDP and employment is tied to tariff-listed US demand. The bank expects tariffs to stall, but not reverse, labour market progress, with modest job gains and the unemployment rate holding near 6.4%.

Jobs data under new U.S. tariffs

“Canada’s labour report for September on Friday will be the first full month of jobs data since U.S. Section 338 tariffs took effect on Aug. 22, offering important clues on their impact.”

“Overall, we estimate that about 0.4% of Canada’s gross domestic product, and employment supports U.S. demand for goods on the tariff lists.”

“We expect new tariffs may have stalled progress in Canada’s labour market, but are not severe enough to reverse it.”

“In September, total employment is expected to have risen by a modest 5,000, leaving year-to-date job growth slightly positive.”

“We continue to rely on the unemployment rate as a more reliable gauge of market conditions.”