Canada’s labour market continued to show resilience in June, with the economy adding 18,000 jobs and the national unemployment rate easing to 6.5 per cent, according to new data released by Statistics Canada on Friday.
The gain follows a strong increase of 87,800 jobs in May and exceeded economists’ expectations of 10,000 new positions. The unemployment rate declined from 6.6 per cent in May, returning to the same level recorded in January.
Most of the employment growth came from part-time positions, particularly in the accommodation and food services sector, as well as wholesale and retail trade. Economists noted that some of the hiring may have been driven by increased demand related to the FIFA World Cup, suggesting the gains could prove temporary.
BMO Chief Economist Doug Porter described the report as encouraging but cautioned against viewing it as a sign of sustained labour market strength. Similarly, CIBC economist Andrew Grantham said employment growth could slow once World Cup-related activity subsides.
While some industries expanded, manufacturing continued to struggle. The sector shed 17,000 jobs in June and has lost approximately 61,000 positions since reaching its recent peak in January 2025. Statistics Canada attributed much of the ongoing weakness to the impact of U.S. tariffs on Canadian manufacturing.
The report also showed signs of improvement for young workers. Employment among Canadians aged 15 to 24 increased by 33,000 jobs, bringing the youth unemployment rate down 0.7 percentage points to 12.7 per cent. Despite the improvement, youth unemployment remains above the pre-pandemic average of 10.8 per cent recorded between 2017 and 2019.
Students planning to return to school in the fall also experienced a stronger start to the summer job market. Their unemployment rate fell to 15.3 per cent in June, down from 17.4 per cent a year earlier. Most student employment gains were concentrated in retail trade, accommodation and food services, and information, culture and recreation.
Meanwhile, wage growth accelerated. Average hourly wages for permanent employees rose 3.7 per cent year over year in June, up from 3.2 per cent in May. The measure is closely monitored by the Bank of Canada as an indicator of underlying inflation pressures.
Despite two consecutive months of employment gains, economists noted that the labour market is still recovering from a difficult start to 2026, when Canada recorded a net loss of more than 112,000 jobs during the first four months of the year.
With the Bank of Canada’s next interest rate decision scheduled for Wednesday, analysts said the June employment report is unlikely to significantly influence the central bank’s policy direction. Both BMO and CIBC expect the latest labour market data to have little impact on the upcoming rate announcement.
