Canada’s economy added a net of 18,200 jobs in June and the unemployment rate edged down to 6.5%, data showed on Friday, slightly beating estimates and continuing the momentum seen in the prior month despite the lingering trade uncertainty.
Analysts polled by Reuters had forecast a net of 10,000 job gains, following a jump of 87,800 jobs in May, and they had estimated the unemployment rate at 6.6%, the same as posted in May.
The stronger-than-expected figures added to evidence that the economy was absorbing the effects of U.S. tariffs better than initially feared, although uncertainty surrounding negotiations over the North American trade agreement remains a constraint on business investment.
The Canadian economy entered a technical recession – two consecutive quarters of economic contraction – at the end of the first quarter on an annualized basis, but the GDP rebounded more than expected in April.
Economists had expected the job gains to be better in select provinces due to temporary or part-time hiring of workers as the metropolitan cities of Toronto and Vancouver hosted the FIFA World Cup.
Statistics Canada said the job gains in June were largely concentrated in part-time workers and in accommodation and food services and wholesale and retail trade.
Part-time employment increased by a net of 17,500 jobs in June, it said, while full-time employment jobs gains were largely unchanged.
The unemployment rate among the youth, or those aged 15-24 years, fell to 12.7% from 13.4%.
While the unemployment rate in this category has improved in the last two months, StatsCan said it remains higher than the pre-pandemic average of 10.8% observed during the period from 2017 to 2019.
The job market has stuttered from the start of the year till April, but has shown signs of stabilizing in the last two months. The average monthly job gains so far this year continue to be flat, in contrast to around 18,000 in 2025 and roughly 35,000 in 2024.
Accommodation and food services, which account for just over 5% of total employment in the country, saw job gains of 14,700 positions in June, posting its third consecutive monthly increase.
This category was the second-biggest contributor to job gains, with the first being wholesale and retail trade, registering gains of 16,400 jobs. This category accounts for almost 14% of total employment in the country.
The biggest sectors that shed jobs were manufacturing and construction – which together lost a total of close to 30,000 jobs.
Average hourly wages of permanent employees, a metric closely tracked by the Bank of Canada to gauge inflation expectations, grew 3.7% in June, a rise from 3.2% in May.
The Canadian dollar firmed after the data and was trading up 0.16% to C$1.4144 against the U.S. dollar, or 70.70 U.S. cents. Yields on the two-year government bonds were up 0.2 basis points to 2.408%.
The BoC will announce its next monetary policy decision next week and money markets are pricing in a hold for a sixth consecutive time.
(Reporting by Promit Mukherjee; Editing by Dale Smith and Ros Russell)
