Canadian Employment (June 2025)

Canada's economy surprises with a healthy job gain in June 

• Surprise! Canada's economy generated 83k new jobs in June (+0.4% month/month), much better than the consensus expectation for a flat reading. However, the gains were driven by a 70K gain in part-time positions.  
• The unemployment rate fell one tick to 6.9% after trending upwards for three months. Despite the labour force continuing to grow faster than we had expected (+0.3% m/m), employment gains outpaced it.
• Looking by sector, wholesale and retail trade led the way, gaining 34k jobs (+1.1% m/m), followed by gains in health care and social assistance (17k, +0.6% m/m). Notably, manufacturing gained 10.5k jobs, although, employment there is still down 1.4% versus a year ago. Most other industries gained jobs, with agriculture (-12.5k, -2.6% m/m), and "other" services standing out with losses (-8.5k, -1.1% m/m). 
• Wage growth cooled in June. Average hourly wages rose 3.2% versus a year ago, down from 3.4% in May.                

Key Implications

• Canada's labour market bucked its weakening trend in June. The unemployment rate fell, and most sectors saw job gains. However, one month isn't going to turn the page on what is a much cooler labour market relative to a year ago. With President Trump making new threats for a higher 35% tariff rate on Canadian goods just last night, certainty for many Canadian businesses doesn't appear to be improving any time soon.  
• The Bank of Canada gets its next kick at the can on July 30th . Today's jobs report is another tick in the resilience tally, but next Tuesday's June inflation report is likely to be the bigger factor in the Bank's deliberations, given recent hotter-than-expected inflation readings. We think a strong argument for further rate cuts remains in Canada, we'll soon see if the BoC agrees.

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