Canada’s unemployment rate edged down to 6.5% in June as the economy added 18,000 jobs, according to the latest data from Statistics Canada. The modest increase in employment followed a significant gain of 87,800 positions in May, signaling a period of stabilization for the national labour market. The June figures surpassed analyst expectations, which had generally anticipated a smaller gain of 10,000 jobs and an unemployment rate of 6.6%.
This latest report provides a key indicator for the Bank of Canada ahead of its upcoming policy meeting. While the decline in the unemployment rate suggests a degree of resilience, the gains were primarily concentrated in part-time work, particularly within the accommodation, food services, and retail trade sectors. These service-sector improvements helped offset ongoing weakness in the goods-producing industries, where manufacturing saw a loss of 17,000 jobs.
Manufacturing has faced persistent challenges, with employment in the sector falling by approximately 61,000 positions since January 2025. Economists attribute this decline largely to trade uncertainty and the impact of tariffs. Despite the broader job growth, the manufacturing sector remains a point of concern for the overall health of the economy.
Younger workers saw a notable improvement in June, with the youth unemployment rate falling 0.7 percentage points to 12.7%. This shift is largely attributed to a strong start to the summer job market. Meanwhile, the national labour force participation rate remained steady at 65.0%.
As the Bank of Canada prepares to decide on interest rates next week, the mixed nature of the June data presents a complex picture. While the headline unemployment rate shows progress, the reliance on part-time hiring and the continued contraction in manufacturing suggest that the economy is still navigating a period of uneven recovery.