Canada’s economy saw an increase of 18,000 jobs in June, maintaining the positive trend in the labor market from the previous month. Statistics Canada data released on Friday showed a modest rise in employment, leading to a slight decline in the unemployment rate to 6.5 percent, aligning with the rate reported 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 the unemployment rate expected to be at 6.6 percent. Job growth in June was mainly concentrated in part-time roles, accommodation and food services, and wholesale and retail trade sectors.
Despite the uptick in job numbers, BMO chief economist Doug Porter cautioned against viewing the figures too optimistically, suggesting that the hiring might be temporary due to events such as the World Cup. CIBC economist Andrew Grantham also noted that employment growth could slow down post-FIFA activities.
Conversely, the manufacturing sector experienced a setback with a loss of 17,000 positions, attributing it to ongoing challenges from U.S. tariffs. Young job seekers, however, saw positive outcomes in June, with a decrease in the youth unemployment rate by 0.7 percentage points to 12.7 percent, alongside the addition of 33,000 jobs for individuals aged 15 to 24.
Statistics Canada highlighted that despite recent improvements, the youth unemployment rate remains higher than the pre-pandemic average. Additionally, student summer job prospects were better than the previous year, with a lower unemployment rate for students planning to resume studies in the fall.
Hourly wages for permanent employees, a key indicator monitored by the Bank of Canada for inflation expectations, increased by 3.7 percent in June. Overall, the job market demonstrated moderate growth in June, following a challenging start to the year that saw a net loss of 112,000 jobs in the first four months of 2026.
Despite the positive employment figures, economists Grantham and Porter suggested that the report is unlikely to prompt the Bank of Canada to adjust interest rates. The upcoming interest rate decision is scheduled for Wednesday, with the latest jobs report serving as a crucial insight into the economic landscape before the decision-making process.