The Canadian economy gained 18,000 jobs in June while the unemployment rate fell to 6.5 per cent, Statistics Canada said Friday.
The jobless rate shed 0.1 percentage points from 6.6 per cent in May, as labour market conditions improved for youth, more people found jobs and the layoff rate remained steady.
This marks the second consecutive drop in the unemployment rate, according to the agency, adding to evidence that the economy is doing better after entering technical recession territory in the first quarter of this year.
Prior to Friday’s release, economists were generally expecting the rate to remain unchanged in June, and that the economy would add only 10,000 positions last month.
“The big picture here is that, after a weak start to the year, Canada is churning out moderate job growth again and the unemployment rate is falling,” BMO economist Douglas Porter wrote in a note to clients.
Youth unemployment, encompassing those aged 15 to 24, fell 0.7 percentage points to 12.7 per cent. StatCan said the decline was linked to an increase in employment by 33,000 positions, driven by more opportunities in part-time work.
StatCan also highlighted that students have been facing a more favourable summer job market than in 2025.
“Summer hiring in Canada got off to a hot start,” Royce Mendes, head of macro strategy at Desjardins, wrote in a note to clients.
“It appears that the unemployment rate for 15-24 year olds is benefitting from the reduction in non-permanent residents, with the youth population shrinking in 2026.”
Overall, there were more jobs in accommodation and food services, which were offset by declines in manufacturing, agriculture and utilities.
“On balance,” said Porter, “There’s not much here to tip the scales for the Bank of Canada, and we continue to see them on hold, both at next week’s decision and through the balance of this year.”
The central bank is expected to make its next interest rate announcement on Wednesday morning.
This is a developing story.
