The Canadian economy saw a significant increase in job creation during June, with 83,000 new jobs added, marking the most substantial growth since January. Statistics Canada reported a slight decrease in unemployment by 0.1 percentage points alongside this job surge. The majority of these new positions were part-time roles, with the private sector contributing 47,000 of the added jobs.
Since January, employment figures have either stagnated or declined, with June’s numbers showing the first decrease in unemployment since the beginning of the year. The wholesale and retail trade industry, as well as health care and social assistance, experienced the most significant job gains, while the agriculture sector saw a decrease in employment.
Economists had predicted a rise in unemployment to 7.1%, but the actual numbers surpassed expectations, reflecting a positive trend in job growth. Nathan Janzen, an economist at RBC, attributed this increase in jobs to a rebound in business sentiment following earlier concerns about tariffs impacting hiring. However, the threat of a 35% tariff on all Canadian goods by the United States remains a potential risk to trade.
Despite the positive job growth, long-term unemployment figures remain concerning, with 1.6 million people still seeking employment. Moreover, student unemployment rates have risen to 17.4% this summer, the highest for the month of June since 2009, excluding pandemic years.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, highlighted the overall positive signals in the latest job report, emphasizing that the outcomes exceeded expectations. However, he cautioned that ongoing trade uncertainties could swiftly alter the economic landscape.
