Canada’s Labour Market Regains Momentum as Unemployment Falls in June

By Tahani Elghazaly
Published July 10, 2026

Latest news on WhatsApp أجدد الأخبار على واتساب

Canada’s labour market regained some momentum in June, as the economy added 18,200 jobs and the unemployment rate fell to 6.5% from 6.6% in May, according to Statistics Canada data reported by Reuters. The result came slightly above economists’ expectations and suggested that the job market is stabilizing after a weaker start to the year.

The June increase was modest compared with May’s stronger gain of 87,800 jobs, but it still added to signs that the Canadian economy is absorbing pressure from trade uncertainty and U.S. tariffs better than many analysts had feared. Reuters said economists had expected a gain of only 10,000 jobs, with the unemployment rate staying unchanged at 6.6%.

Most of the new positions came from part-time work, with part-time employment rising by 17,500 jobs, while full-time employment was largely unchanged. Statistics Canada said the strongest gains were concentrated in accommodation and food services, as well as wholesale and retail trade, two sectors often affected by seasonal hiring and consumer activity.

The services side of the economy carried most of the improvement. Accommodation and food services added 14,700 jobs in June, marking a third consecutive monthly increase for the sector, while wholesale and retail trade gained 16,400 positions. By contrast, manufacturing and construction together lost close to 30,000 jobs, showing that trade-exposed and goods-producing sectors remain under pressure.

Youth employment also showed some improvement. The unemployment rate among Canadians aged 15 to 24 fell to 12.7% from 13.4%, although Statistics Canada noted that it remains higher than the 2017-2019 average of 10.8%. This suggests that young workers are finding more opportunities, but still face a tougher labour market than before the pandemic.

Wage growth remained an important signal for the Bank of Canada. Average hourly wages for permanent employees increased 3.7% year-over-year in June, up from 3.2% in May, a measure closely watched because of its link to inflation expectations and future interest-rate decisions.

The latest labour figures come just before the Bank of Canada’s next policy decision. Reuters reported that money markets expect the central bank to keep interest rates steady for a sixth consecutive time, with two months of hiring gains giving policymakers more confidence to wait before making any move.

The broader message from the June report is that Canada’s labour market is not booming, but it is no longer sending the same warning signs seen earlier in the year. The recovery remains uneven, with service-sector hiring leading the way while manufacturing and construction continue to struggle under the weight of tariffs, trade negotiations and weaker investment confidence