Canada Posts Surprise Job Gains in June, Unemployment Rate Dips to 6.9%
Canada’s unemployment rate edged down to 6.9% in June, defying expectations, as several key sectors—including wholesale and retail trade, manufacturing, healthcare, and social assistance—recorded stronger-than-anticipated job growth, according to data released Friday.
Statistics Canada reported that the economy added 83,100 jobs last month, marking the first net employment gain since January. Most of the increase was in part-time positions.
Economists surveyed by Reuters had expected the jobless rate to rise slightly to 7.1% from May’s 7%, with no net employment growth. The monthly jobs report typically has a standard margin of error of around 32,000.
This report comes just ahead of the Bank of Canada’s (BoC) July 30 policy meeting. The stronger-than-expected labor market data may influence the central bank to hold interest rates steady. June inflation figures, due next week, will also weigh heavily on the BoC’s decision.
Following the jobs report, market expectations for a July rate cut fell below 20%, down from 30% a day earlier, when President Donald Trump announced plans to raise tariffs on Canadian imports to 35% from the previously threatened 25%, effective August 1.
“The unemployment rate remains elevated, but other positive indicators in the report reduce the likelihood of a BoC rate cut this month,” CIBC Capital Markets economist Katherine Judge wrote in a client note.
Following the report, the Canadian dollar slipped 0.12% to 1.3671 against the U.S. dollar, or 73.15 U.S. cents. Yields on Canada’s two-year government bonds rose 1.9 basis points to 2.715%.
While the number of unemployed individuals in June remained relatively unchanged from May, it was up 9% year-over-year to 128,000. Notably, over 20% of unemployed Canadians in June had been job hunting for 27 weeks or longer—a significant rise from the previous year.
Despite earlier signs of pressure in tariff-sensitive industries like manufacturing and transportation, June data was mixed. Transportation lost 3,400 jobs, while manufacturing rebounded with a gain of 10,500.
The largest employment jump came from wholesale and retail trade, which added 33,600 jobs. Healthcare and social assistance followed with 16,700 new positions. Meanwhile, the agriculture sector lost 6,000 jobs during the month.
Canada’s labor force participation rate—representing the share of people aged 15 and over who are active in the workforce—rose slightly to 65.4% from 65.3% in May.
Wages also showed moderate growth. The average hourly wage for permanent employees, a key inflation indicator for the BoC, increased 3.2% year-over-year to C$37.22.
