Canada’s labour market showed signs of stabilization in June, as the economy added 18,000 jobs and the national unemployment rate edged down to 6.5 per cent. This modest growth follows a significant surge of 88,000 jobs in May, suggesting the market is finding a steadier footing after a turbulent spring. The latest data from Statistics Canada indicates that the unemployment rate has returned to the level last seen in January, providing a clearer picture of an economy navigating through ongoing trade uncertainties and shifting industrial demands.
The job gains were primarily driven by the service sector, with notable increases in wholesale and retail trade, as well as accommodation and food services. Economists have pointed to the hosting of FIFA World Cup matches in major cities like Toronto and Vancouver as a likely contributor to the hiring boost in hospitality. Conversely, the goods-producing sector faced challenges, shedding 43,700 positions, with manufacturing alone accounting for a loss of 17,000 jobs as U.S. tariffs continue to weigh on industrial output.
Young workers, who have faced a difficult labour market in recent years, saw a positive shift in June. The youth unemployment rate fell by 0.7 percentage points to 12.7 per cent, marking the lowest level since May 2024. This improvement was largely supported by a strong start to the summer job season, particularly in part-time roles. While full-time employment remained largely unchanged, the rise in part-time opportunities helped absorb more job seekers into the workforce.
Looking ahead, the stability of the labour market remains a key focus for policymakers and analysts. While the current figures are seen as a positive step, experts caution that the recovery remains uneven across different sectors. With population growth slowing and immigration policy tightening, the threshold for job creation needed to keep the unemployment rate steady has shifted. The Bank of Canada is expected to monitor these trends closely as it evaluates future interest rate decisions, balancing the need for economic growth against the backdrop of persistent industrial pressures.