In June, the Canadian economy saw a notable increase of 83,000 jobs, marking the first significant surge since January, as per Statistics Canada. The unemployment rate also slightly decreased by 0.1 percentage points during this period. The majority of the new jobs were part-time positions, with 47,000 added in the private sector. From January onwards, employment levels had either plateaued or decreased, following the addition of 76,000 jobs earlier in the year.
The month of June witnessed the first decline in unemployment since January, after a previous drop of 0.3 percentage points between March and April, maintaining stability in May. Industries such as wholesale and retail trade, along with health care and social assistance, experienced a notable increase in job opportunities. However, the agriculture sector saw a decrease in employment by a few thousand positions.
Economists were pleasantly surprised by the latest figures, as a Reuters poll had predicted a rise in unemployment to 7.1%, with employment remaining unchanged. Analysts, including Nathan Janzen from RBC, attributed the job growth to a positive shift in business sentiment following earlier concerns over tariffs. Despite the positive outlook, ongoing trade risks, such as the recent threat of a 35% tariff on Canadian goods by the U.S., remain a concern.
While the recent job data reflects a positive trend, the overall unemployment situation still presents challenges. Approximately 1.6 million individuals were unemployed in the previous month, with over one-fifth of job seekers having been looking for work for 27 weeks or more, indicating a 4.1 percentage point increase from the previous year.
For students seeking summer employment, the unemployment rate stood at 17.4%, up from 15.8% compared to June 2024. Statistics Canada highlighted that this was the highest June unemployment rate since 2009, excluding pandemic years with exceptionally high unemployment rates.
Despite some drawbacks, like the prevalence of part-time jobs among the newly added positions, there were positive signs overall, according to Benjamin Reitzes, Managing Director of Canadian Rates and Macro Strategist at BMO. Reitzes emphasized the report’s better-than-expected performance compared to economists’ projections, indicating resilience in the economy amid uncertainties. However, ongoing trade tensions could swiftly alter the economic landscape in the future.
