Canada posts surprise job gains, June unemployment edges down

Canada’s unemployment rate fell slightly to 6.9% in June as the wholesale and retail trade sectors as well as manufacturing, healthcare and social assistance all saw surprise job growth, data showed on Friday.

- 

The economy added 83,100 new jobs in June, the first net increase since January 2025, Statistics Canada said. Most of the employment growth was in part-time work.

Analysts polled by Reuters had estimated the unemployment rate would tick up to 7.1% from 7% in May, with no job additions. The jobs report usually has a standard error of around 32,000 between two consecutive months.

Friday's release was the final jobs report before the Bank of Canada’s monetary policy decision on July 30, and better-than-expected unemployment and job addition numbers are likely to tilt the bank towards another hold in its policy rate. June inflation data is due out next week.

Money market bets for a rate cut this month shrank to below 20% following the labour force survey.

On Thursday, rate cut bets were at 30% after US President Donald Trump said he would impose 35% tariffs on Canadian imports from Aug. I, up from 25% previously threatened.

"While the unemployment rate is still elevated, the strength in other measures in this report clearly diminishes the odds of a BoC cut in July,” Katherine Judge, economist at CIBC Capital Markets wrote in a note.

The Canadian dollar was trading down 0.1% to 1.3671 to the US dollar, or 73.15 US cents. Bond yields on the two-year government bonds were up 1.9 basis points to 2.7158.