07:49 AM EDT, 04/04/2025 (MT Newswires) -- Canada will release the Labour Force Survey (LFS) data for March at 8:30 a.m. ET Friday, said Bank of Montreal (BMO).

The bank noted that United States tariffs and the threat of more tariffs likely weighed on the Canadian labor market in March. BMO is anticipating employment to be unchanged, as steel & aluminum tariffs hit jobs in the sector.

While the bank hasn't seen broad-based layoffs yet, the pressure from those and broader non-USMCA-compliant tariffs is expected to drive stagnant job growth in the month. That will lift the unemployment rate a tick to 6.7%, still two ticks shy of November's cycle high.

There's a further downside to employment over the coming months, depending on how the tariff backdrop evolves, stated the bank. Hours could see an even bigger hit as work-sharing programs come into effect due to pressure on manufacturing production. Finally, wage growth has slowed in the past few months, consistent with a loosening labour market.

Not getting touched by reciprocal tariffs, Canada's near-term economic outlook is now not as dire, which should make the Bank of Canada more cautious about rate cuts, pointed out BMO. But once the weaker U.S. economy is felt in Canada and the Federal Reserve is cutting rates again, the bank reckons that the BoC will resume easing and to the same extent as before.

The US dollar (USD) is firmer (BBDXY +0.23%) with the Canadian dollar (CAD or loonie) weaker (CAD per USD +0.47%), according to BMO.