Unemployment rate falls to 6.5% in June with wage growth and student jobs improving
Canadian students are heading into the strongest summer job market in three years, with the unemployment rate for those returning to school in September falling to 15.3% in June, down from 17.4% a year earlier.
The figures come from Statistics Canada's latest Labour Force Survey, and CPA Canada chief economist David-Alexandre Brassard says the improvement is being felt across the youth labour market more broadly.
"Students are facing a better summer labour market than they have in three years, and that is reflected in youth unemployment which is declining," Brassard said.
Statistics Canada's data show the broader youth unemployment rate for those aged 15 to 24 fell 0.7 percentage points to 12.7% in June, close to the recent low of 12.8% seen in November 2025 and January 2026, though still above the 2017-2019 pre-pandemic average of 10.8%. Youth employment rose by 33,000, or 1.2%, driven mainly by part-time hiring, which increased by 25,000, or 1.9%.
Age groups vary
Among returning students specifically, the improvement varied by age group.
Those aged 20 to 24, typically in post-secondary education, saw their unemployment rate fall to 8.2%, a 4.1 percentage point drop from a year earlier. Students aged 17 to 19 saw their rate fall to 16.5%, down 2.5 percentage points.
The youngest group, aged 15 to 16, fared worse, with unemployment rising 2.8 percentage points to 30.6%, as many were still searching for summer work while attending high school during the survey reference week. Retail trade, accommodation and food services, and information, culture and recreation were the leading employers of returning students, accounting for 25.7%, 23.3% and 13.0% of student jobs respectively.
The wider labour market also held steady in June. Employment rose by a modest 18,000, or 0.1%, following a stronger gain of 88,000 in May, and the unemployment rate edged down 0.1 percentage points to 6.5%, marking a second consecutive monthly decline.
"After a blockbuster May, the labour market added a small number of private-sector part-time jobs in June," Brassard said. "The good news is that we maintained May's gains, allowing the unemployment rate to edge down to 6.5 per cent."
Manufacturing pressure persists
Not every sector is sharing in the recovery. Manufacturing employment fell by 17,000, or 0.9%, in June, erasing May's gain, and remains more than 50,000 jobs below pre-tariff levels, Brassard noted. Statistics Canada figures show the sector has lost 61,000 jobs, or 3.2%, since its January 2025 peak, a decline tied to ongoing tariff-related uncertainty. Accommodation and food services moved in the opposite direction, adding 15,000 jobs, or 1.2%, for a third straight monthly increase, with Quebec and Ontario driving most of the gains.
Wage growth remained firm, with average hourly wages up 3.3% year over year to $37.20, following 3.0% growth in May. Brassard said this is helping sustain consumer spending even as Canada's population continues to decline.
"This report indicates that the labour market is no longer losing jobs," Brassard said. "It does not yet mean that job creation has replaced job losses, but stable unemployment and wage growth are encouraging."
Rate outlook
Taken together with the prior labour market report and recent GDP figures, Brassard said this release supports the view that the Bank of Canada's policy rate is currently set appropriately. He cautioned, however, that the absence of a full 16-year renewal of CUSMA leaves sectoral tariffs and trade uncertainty as ongoing risks.
