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Canada's June Job Gains Beat Expectations, but Manufacturing Weakness Persists

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The Canadian labour market added 18,000 jobs in June, above consensus expectations of 10,000, but with continued pockets of unevenness.

While job growth was led by wholesale & retail, food & accommodation and info & recreation, the manufacturing sector lost 16,800 jobs while the construction sector lost 12,900 jobs in the same month.

"Manufacturing, where job losses continue to mount, remains a poster child of the uncertainty hanging over the Canadian economy. It is a reminder that the economy continues to operate below capacity, with downside risks concentrated in trade-exposed sectors," wrote TD economist Maria Solovieva.

CIBC's Andrew Grantham and Desjardins' Royce Mendes separately noted that the summer job market for youths improved for the second straight month, and the unemployment rate for 15-24 year olds fell to 12.7%, from 13.4% in May and 14.3% in April. Mendes linked this improvement to the reduction in non-permanent residents, with the youth population shrinking in 2026.

"While we can quibble about the details, the big picture here is that, after a weak start to the year, Canada is churning out moderate job growth again and the unemployment rate is falling. In other words, it doesn't take a lot of new jobs -- up just 0.5% in the past year-to pull down the jobless rate when the population is ebbing," wrote BMO Chief Economist Douglas Porter in a note.

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