Canada Labour Force Survey (Jun. 2026)

Labour market recovering

The modest rise in employment in June, following the bumper rise in May, will provide further reassurance to the Bank of Canada that the economy is recovering from its weak start to the year.

The 18,200 rise in employment in June was slightly stronger than the consensus had expected but a bit weaker than our own forecast. The increase was almost entirely due to a 17,500 rise in part-time employment, which probably reflected more seasonal hiring, as it was itself driven by a rise in workers aged 15-24. In contrast, employment among the 25+ cohort fell by 14,300 entirely due to a large fall in employment in the 55+ category. The sector-level breakdown reinforces the seasonal hiring narrative. The largest increases were in wholesale and retail trade (+16,400) and accommodation and food services (+14,700), which probably reflected stronger demand during the FIFA World Cup last month. That contrasts with employment in the goods-producing sector, which contracted sharply by 43,700, driven by further marked weakness in manufacturing and construction.

With the rise in employment more than offsetting the muted 5,000 rise in the labour force, the unemployment rate inched down further to 6.5%, from 6.6% in May, its lowest level since January. That said, the decline in unemployment was concentrated in the volatile 15-24 category, which the Stats Can press release attributed to a stronger summer jobs market for students this year compared with 2025. Hence, the Bank is unlikely to conclude that the labour market is undergoing renewed tightening, even if it will be pleased to see that the jobs market looks more stable. Meanwhile, wage growth rebounded to 3.3% y/y, from 3.0% in May.