Canada’s economy saw a rise of 18,000 new jobs in June, maintaining the positive trend observed in the previous month. Statistics Canada data released on Friday revealed that this moderate job growth led to a slight decrease in the unemployment rate to 6.5%, aligning with the rate recorded in January.
Analysts surveyed by Reuters had anticipated a net increase of 10,000 jobs after a substantial surge of 87,800 jobs in May, with an expected unemployment rate of 6.6%. The job gains in June were primarily concentrated in part-time positions, as well as in the accommodation and food services and wholesale and retail trade sectors.
Despite the uptick in job numbers, BMO’s chief economist, Doug Porter, cautioned against viewing the figures as a strong indicator of economic strength, suggesting that the hiring might be temporary due to the World Cup. Similarly, CIBC economist Andrew Grantham noted that the recent employment growth could stall post-event.
On the flip side, the manufacturing sector experienced a loss of 17,000 jobs, acting as a drag on the overall employment figures. This industry has shed around 61,000 jobs since reaching a peak in January 2025, with ongoing pressures from U.S. tariffs impacting the sector, as stated by Statistics Canada.
In a positive development for young job seekers, the unemployment rate among youth decreased by 0.7 percentage points to 12.7% in June, with 33,000 positions added for individuals aged 15 to 24. Although there has been improvement in youth employment in the last two months, it remains higher than the pre-pandemic average of 10.8% observed from 2017 to 2019.
Data also indicated a more favorable summer job market for student workers compared to the previous year. The unemployment rate for students intending to return to school in the fall dropped to 15.3% last month, down 2.1 percentage points from June 2025. However, this rate still exceeded the pre-pandemic average of 13%.
Returning students found job opportunities mainly in retail trade, accommodation and food services, and information, culture, and recreation sectors during June. Additionally, average hourly wages for permanent employees, a key metric monitored by the Bank of Canada for inflation expectations, increased by 3.7% in June, up from 3.2% in May.
Despite the modest job growth in June following a challenging start to the year, both BMO’s Porter and CIBC’s Grantham indicated that the report is unlikely to prompt the Bank of Canada to adjust interest rates. The next interest rate decision is scheduled for Wednesday, with the latest jobs report serving as the final major economic update for the central bank ahead of this decision.
