Canada’s economy saw an increase of 18,000 jobs in June, maintaining the positive trend observed in the previous month. Statistics Canada data released on Friday revealed this moderate job growth, which contributed to a slight decline in the unemployment rate to 6.5%, aligning with the rate recorded in January.
Analysts surveyed by Reuters had anticipated a net gain of 10,000 jobs after a substantial surge of 87,800 jobs in May, with an expected unemployment rate of 6.6%. The job additions in June were mainly in part-time roles, as well as in the accommodation and food services and wholesale and retail trade sectors.
However, BMO chief economist Doug Porter cautioned against overinterpreting these figures as overly positive, suggesting that the hiring might be temporary due to events like the World Cup. Similarly, CIBC economist Andrew Grantham highlighted the possibility of employment growth stalling post-World Cup.
Conversely, the manufacturing sector experienced a loss of 17,000 positions, significantly impacting the overall job figures. Statistics Canada noted a decline of 61,000 jobs in this industry since its peak in January 2025, attributing it to the ongoing impact of U.S. tariffs.
Youth employment saw a positive trend in June, with a 0.7 percentage point decrease in the unemployment rate for individuals aged 15 to 24, adding 33,000 jobs in this demographic. Despite these improvements, the youth unemployment rate remains higher than the pre-pandemic average observed from 2017 to 2019.
Student employment prospects for the upcoming school year also improved, as indicated by a lower unemployment rate of 15.3% for students intending to return to school in the fall, a 2.1 percentage point decrease from June 2025. However, this rate still surpasses the pre-pandemic average of 13%.
The job market for returning students in June primarily focused on sectors like retail trade, accommodation and food services, and information, culture, and recreation. Additionally, average hourly wages for permanent employees, a crucial metric monitored by the Bank of Canada for inflation expectations, increased by 3.7% in June, up from 3.2% in May.
Both BMO’s Porter and CIBC’s Grantham acknowledged the moderate job growth in June, following a challenging start to the year with a net loss of 112,000 jobs in the first four months of 2026. They suggested that the latest report is unlikely to prompt the Bank of Canada to adjust interest rates, with the next rate decision scheduled for Wednesday.
The June employment report provides key insights into the current economic landscape ahead of the upcoming central bank meeting, offering a comprehensive overview of the job market trends and wage growth in Canada.