Canada's jobless rate drops to 6.9% in June as part-time gains mask long-term labour strain
Canada’s student unemployment rate reached 17.4 percent in June — the highest for that month in a non-pandemic year since 2009 — as companies held back hiring amid ongoing tariff threats from the US, according to Statistics Canada.
The figure, up from 15.8 percent in June 2024, reflects the challenges for employers navigating policy uncertainty and budget pressure.
As per Statistics Canada, the broader youth unemployment rate stood at 14.2 percent in June, a 0.7 percentage point increase from a year earlier and well above the 2017–2019 pre-pandemic average of 10.8 percent.
Economist Viet Vu of Toronto Metropolitan University described the student jobless rate as “really concerning,” noting it often acts as a leading recession indicator.
According to CP24, companies typically reduce junior positions first during financial strain, a sign that businesses may be struggling.
Jim Stanford of the Centre for Future Work attributed the current student job market conditions to US tariff policies, saying, “The blame for the high student unemployment rate rests solely at Donald Trump’s doorstep.”
While the overall labour market added 83,000 jobs in June, the majority were part-time, as reported by Statistics Canada.
Wholesale and retail trade accounted for 34,000 new jobs, while healthcare and social assistance added 17,000.
Manufacturing also gained 10,000 jobs, though the sector remains down more than 26,000 jobs compared to last year.
Statistics Canada said the national unemployment rate fell to 6.9 percent in June — the first decline since January — beating economist expectations of a rise to 7.1 percent.
The employment rate edged up to 60.9 percent. Total hours worked grew 0.5 percent month-over-month and 1.6 percent year-over-year.
Average hourly wages rose 3.2 percent from June 2024, following a 3.4 percent gain in May.
Employment rose in Alberta, Quebec, Ontario and Manitoba. However, job losses occurred in Newfoundland and Labrador and Nova Scotia. Windsor recorded the highest jobless rate among major cities at 11.2 percent
Despite the job gains, there were still 1.6 million unemployed individuals in June, up 9 percent year-over-year, as reported by The Globe and Mail.
More than 20 percent of those without jobs had been looking for work for over 27 weeks — a 4.1 percentage point increase from the previous year, according to CBC.
The Bank of Canada will weigh this data ahead of its interest rate decision on July 30.
According to Financial Post, the central bank paused its policy rate in April and June, citing trade uncertainty and core inflation.
Benjamin Reitzes of BMO said the June jobs report was “materially better than expected,” but added that “ongoing tariff turbulence could change things quickly going forward.”
Leslie Preston of TD Bank noted that inflation data due next week would likely influence the central bank’s decision more than the labour report.
As per LSEG data cited by The Globe and Mail, markets currently see only a 19 percent chance of a rate cut in July.
Royce Mendes of Desjardins Capital Markets said the labour numbers were “solid,” but not decisive enough to alter the central bank’s course, adding that inflation will “play a much more important role.”
