Canada’s economy saw an increase of 18,000 jobs in June, maintaining the positive trend in the job market from the previous month. Statistics Canada’s data, released on Friday, revealed that this modest 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 gain of 10,000 jobs after a substantial increase of 87,800 jobs in May. They had also predicted the unemployment rate to be 6.6%. The job additions in June were primarily in part-time positions, as well as in the accommodation and food services, and wholesale and retail trade sectors.
However, BMO chief economist Doug Porter cautioned against interpreting these figures too optimistically, suggesting that the hiring surge might be temporary due to events like the World Cup. Similarly, CIBC economist Andrew Grantham noted that the recent employment growth might stall post the FIFA-related impact.
Contrastingly, the manufacturing sector experienced a loss of 17,000 jobs, impacting the overall employment figures. This industry has shed around 61,000 jobs since reaching a peak in January 2025, attributed to the adverse effects of U.S. tariffs, as mentioned by Statistics Canada.
Despite recent challenges faced by young workers, the job market in June showed positive signs for youth job seekers. The unemployment rate among youth decreased by 0.7 percentage points to 12.7%, with the addition of 33,000 jobs for individuals aged 15 to 24. Although there has been improvement in this category in the past two months, the current rate remains higher than the pre-pandemic average of 10.8% from 2017 to 2019.
The data also indicated an improved summer job market for student workers compared to the previous year. The unemployment rate for students planning to resume studies in the fall dropped to 15.3% in June, a 2.1 percentage point decline from June 2025. However, this rate still exceeded the pre-pandemic average of 13%.
Returning students predominantly secured jobs in sectors such as retail trade, accommodation and food services, and information, culture, and recreation in June. Additionally, the average hourly wages of 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.
Overall, experts like BMO’s Porter highlighted the moderate job growth in June following a challenging start to the year, during which Canada lost a net of 112,000 jobs in the initial four months of 2026. Both CIBC’s Grantham and Porter suggested that the modest job report is unlikely to prompt the Bank of Canada to adjust interest rates.
The upcoming interest rate decision is scheduled for Wednesday, and the recent jobs report serves as the final significant assessment of the economy before the decision.