Unemployment drops to 6.9% in June, but student joblessness hits highest non-pandemic June since 2009
A spike in part-time hiring helped Canada add 83,000 jobs in June, even as the country recorded its highest student unemployment rate for a non-pandemic June since 2009, according to Statistics Canada.
The jobless rate declined to 6.9 percent in June, down from 7 percent in May, marking the first decrease since January, as reported by Financial Post.
Most of the new roles were part-time—around 70,000 positions—while private sector hiring rose by 47,000. Statistics Canada said the employment rate ticked up 0.1 percentage points to 60.9 percent.
However, youth and student joblessness continued to worsen.
Statistics Canada noted that the unemployment rate for youth aged 15 to 24 rose to 14.2 percent, up 0.7 percentage points from a year ago and significantly higher than the 2017–2019 pre-pandemic average of 10.8 percent.
For returning students—defined as those enrolled full-time in March and planning to return to school in the fall—the jobless rate climbed to 17.4 percent, matching June 2009, according to CP24.
“This has been a brutal summer for students to look for a job... the openings are just not there,” said Jim Stanford, economist at the Centre for Future Work, in an interview with CTV News.
Viet Vu, economic researcher at Toronto Metropolitan University, warned that youth unemployment could be a leading signal of an approaching recession.
Trade tensions were cited as a factor behind hiring hesitancy.
According to CP24, economists pointed to the impact of the US tariff war on Canadian hiring, particularly among companies facing budget constraints.
As per The Globe and Mail, US President Donald Trump has threatened a 35 percent tariff on Canadian goods starting August 1, and previously doubled tariffs on steel and aluminium to 50 percent.
A further 50 percent tariff on copper has also been announced.
As reported by the Financial Post, Bank of Canada Governor Tiff Macklem previously stated that a US-Canada trade deal is “critical” for jobs and economic growth, warning that continued tariffs could drive consumer prices higher.
Prime Minister Mark Carney confirmed that Canada will work toward the August 1 deadline for a new trade arrangement.
Despite tariff pressures, some sectors recorded hiring gains.
Wholesale and retail trade added 34,000 jobs, healthcare and social assistance added 17,000, and manufacturing—though down 26,000 year-over-year—added 10,000 jobs in June, as reported by The Globe and Mail.
Total hours worked rose 0.5 percent in the month and were up 1.6 percent year-over-year. Average hourly wages increased by 3.2 percent in June following a 3.4 percent increase in May.
Employment gains were spread across Alberta, Ontario, Quebec, and Manitoba, while Newfoundland and Labrador and Nova Scotia recorded declines, according to Statistics Canada.
Windsor recorded the highest unemployment rate among major cities at 11.2 percent, due to auto sector exposure to tariffs.
Economists had expected employment to remain flat and unemployment to rise to 7.1 percent, as per a Reuters poll cited by CBC. Instead, the results marked the strongest job growth since January.
Benjamin Reitzes, managing director at BMO, wrote in a note that “no matter how you slice things, this report is materially better than expected,” though he cautioned that trade turbulence could alter the outlook quickly.
Still, some uncertainty surrounds the interpretation of June’s data. “Given the uncertainty hanging over the Canadian economy, many (including us) will be skeptical of this report,” said Reitzes in a separate note quoted by the Financial Post.
Nathan Janzen, an economist at RBC, described the numbers as reflecting a “bounce-back” in hiring confidence following earlier tariff-related hesitation.
The data offers the final labour market snapshot before the Bank of Canada’s July 30 rate decision. The central bank has held rates steady since April, citing trade uncertainty and inflation concerns.
According to TD Bank economist Leslie Preston, “today’s jobs report is another tick in the resilience tally,” but she said next week’s inflation reading will likely weigh more heavily in the Bank’s decision.
Market expectations for a rate cut in July have diminished.
As reported by The Globe and Mail, LSEG data showed that odds of a rate reduction fell to 19 percent from 26 percent following the jobs report.
Royce Mendes of Desjardins Capital Markets said the labour data was “solid” but added that it would not be the swing factor, with inflation figures set to play a more decisive role.
