June Jobs Report: Canada's Employment Surges Despite Economic Uncertainties

June Jobs Report: A Surprising Uptick in Employment

Canada's job market showed unexpected resilience in June, with the unemployment rate dropping slightly to 6.9%. This comes as a surprise to many economists who had anticipated a rise in unemployment. The economy added 83,100 new jobs, marking the first net increase since January. Notably, the majority of this growth was in part-time work.

Sector-Specific Growth and Declines

• Wholesale and retail trade saw the most significant increase, adding 33,600 jobs.
• Healthcare and social assistance followed with a 16,700 job increase.
• Conversely, the agriculture sector lost 6,000 jobs, and transportation saw a decline of 3,400 positions.

Economic Indicators and Bank of Canada's Next Move

The average hourly wage for permanent employees rose by 3.2% to $37.22, a key metric for the Bank of Canada (BoC) to gauge inflationary trends. With the BoC's monetary policy decision looming on July 30, this stronger-than-expected jobs report could influence a decision to hold the policy rate steady.

Long-Term Unemployment Trends

While the number of unemployed Canadians remained stable from May to June, there's been a 9% year-over-year increase, totaling 128,000 more unemployed individuals. Alarmingly, over one in five unemployed individuals have been job hunting for 27 weeks or more, a sharp rise from June 2024.

Tariff Impacts and Sector Strains

Sectors vulnerable to tariffs, such as transportation and manufacturing, have shown signs of strain over the past three months. Despite this, manufacturing posted a surprising gain of 10,500 jobs in June.

Labor Market Participation

The participation rate edged up to 65.4% from 65.3% in May, indicating a slight increase in the number of people actively engaged in the labor market.

This report sets the stage for the upcoming June inflation data, which will be crucial for the BoC's final policy decision.