Unemployment rate fell to 6.5% in June with 18K new jobs, says StatCan

The Canadian economy kept adding jobs at a steady pace in June, in part because the youth summer job market got off to a great start, but economists say there are still areas of concern.

Eighteen-thousand net new jobs were added to Canada’s labour force last month, according to the Labour Force Survey released by Statistics Canada Friday.

The overall unemployment rate fell to 6.5 per cent from 6.6 per cent in May, when 88,000 net jobs were added. At the same time, sectors hit hard by economic uncertainty and tariffs saw weakness last month, including manufacturing.

“Not a blockbuster report, but one that still took the labour market in the right direction,” says senior economist Brendon Bernard at Indeed Canada in a statement.

Statistics Canada says 33,000 workers aged 15 to 24 found employment in June, which was a better start than last year.

The youth unemployment rate fell 0.7 per cent from May to 12.7 per cent in June, which is down from 14.2 per cent a year earlier.

Most of those younger workers — about 25,000 — found part-time roles, the agency says.

Among returning students aged 15 to 24, the unemployment rate was 15.3 per cent, which is down from 17.4 per cent a year earlier.

They mostly found work in retail trade (25.7 per cent), accommodation and food services (23.3 per cent) and information, culture and recreation (13 per cent).

“Labour market conditions held onto a larger-than-expected improvement in May with the unemployment rate edging down to 6.5 per cent in June from 6.6 per cent the prior month, led by a pullback in the youth unemployment rate on an improved summer job market,” said assistant chief economist Nathan Janzen at Royal Bank of Canada in a statement.

“The labour market is still not strong — the unemployment rate is still higher than normal.”

The manufacturing sector took a hit last month, shedding 17,000 jobs, or a drop of 0.9 per cent. That’s part of a rougher trend, where some 61,000 manufacturing jobs have been lost since a recent peak in January 2025.

Agriculture also felt the squeeze last month with 7,600 jobs lost (down 3.3 per cent), while utilities lost 7,300 jobs (down 4.3 per cent).

“Canada’s labour market finally caught a bit of a break in June,” said economist Anupriya Gangopadhyay of the Business Data Lab and Canadian Chamber of Commerce in a statement.

“The recovery is still uneven. Manufacturing, agriculture, and utilities all lost jobs, reminding us that some sectors of the economy continue to face pressure.”

Canada’s economy has been navigating a path of uncertainty after more than a year of U.S. President Donald Trump’s tariff policies and rocky CUSMA (Canada-U.S.-Mexico-Agreement) trade negotiations.

On top of trade uncertainty, the Iran war has caused prices for oil and other commodities to spike in recent months, which could translate to higher costs for businesses and consumers alike.

“The weak portions of the report were concentrated in manufacturing and construction, which both declined in June, reversing gains in May,” said Bernard.

“Trends in both sectors, particularly in manufacturing, have been subdued, a sign that the economy remains far from firing on all cylinders.”

A Deloitte outlook report from last month described the economy as being “on pause.”

The biggest issue, Deloitte said, is that the overall uncertainty weighing on businesses means they are hesitant to invest until there is a clearer outlook, and less investment can translate to fewer jobs being created.

“While some of the recent volatility in the market appears to be easing, broader global and trade uncertainty still cloud the outlook,” said Gangopadhyay.

The June jobs report will be the Bank of Canada’s last major look at the state of the economy before making its next interest rate decision on Wednesday.

– with a file from The Canadian Press