Canada’s Job Market Gets a Summer Boost as Youth Employment Rebounds, But Manufacturing Keeps Sliding

Canada’s labour market posted modest but welcome gains in June, buoyed largely by a stronger-than-usual season for student and youth hiring, even as manufacturers and other tariff-exposed industries continued to struggle.

Statistics Canada’s latest Labour Force Survey, released Friday, showed the economy added roughly 18,000 net jobs last month. That’s a noticeably smaller gain than May’s 88,000, but it was enough to nudge the national unemployment rate down a tick, from 6.6% to 6.5%.

Economists were quick to temper expectations while still framing the report as encouraging. Brendon Bernard, a senior economist at Indeed Canada, described it as a modest step in the right direction rather than a standout month.

The standout story in June’s data was young workers. Statistics Canada reported that about 33,000 Canadians between the ages of 15 and 24 found jobs last month a stronger showing than the same period a year ago. The vast majority of those positions, roughly 25,000, were part-time.

That hiring wave helped drive the youth unemployment rate down by 0.7 percentage points to 12.7%, a meaningful improvement from 14.2% a year earlier.

Among students specifically who returned to the job hunt, the unemployment rate came in at 15.3%, down from 17.4% last year. Most of these young workers landed jobs in familiar seasonal territory: retail (25.7%), hospitality and food service (23.3%), and the culture, information and recreation sector (13%).

Nathan Janzen, assistant chief economist at RBC, said the report essentially preserved the surprisingly strong footing the labour market found in May, with the drop in the jobless rate driven largely by that youth hiring surge. Still, he cautioned that the broader picture remains soft, noting the unemployment rate is sitting above where it would typically be in a healthy economy.

Not every part of the economy shared in the good news. Manufacturing lost 17,000 jobs in June, a 0.9% decline that adds to a longer slide the sector has now shed about 61,000 positions since peaking in January 2025.

Other goods-producing industries also struggled. Agriculture lost 7,600 jobs, down 3.3%, while the utilities sector dropped 7,300 positions, a 4.3% decrease.

Anupriya Gangopadhyay, an economist with the Business Data Lab and the Canadian Chamber of Commerce, welcomed the overall improvement but was careful not to overstate it, pointing out that continued losses in manufacturing, agriculture and utilities show that parts of the economy are still under real strain.

Bernard echoed that concern, noting that the softest spots in the report were concentrated in manufacturing and construction, both of which slipped backward in June after gaining ground in May. He called the ongoing weakness in manufacturing in particular a signal that the broader economy still isn’t running at full strength.

The report lands against a backdrop of prolonged economic unease. Canadian businesses have spent more than a year contending with U.S. tariffs under President Donald Trump and difficult renegotiations of the Canada-U.S.-Mexico trade agreement (CUSMA).

Adding to the pressure, conflict involving Iran has pushed oil and other commodity prices higher in recent months a development that could eventually feed through to higher costs for both companies and consumers.

A Deloitte economic outlook published last month captured the mood, characterizing the Canadian economy as essentially “on pause.” According to that report, persistent uncertainty is making businesses reluctant to commit to new investments until the path ahead becomes clearer and when investment stalls, so does job creation.

Gangopadhyay struck a similar note, saying that while some market volatility appears to be settling down, uncertainty around global trade continues to cast a shadow over the outlook.

The timing of Friday’s jobs report is notable: it’s the last major economic snapshot the Bank of Canada will have before its next interest rate announcement on Wednesday. With inflationary pressure from oil prices in the mix and a labour market that’s improving but still fragile, the report gives policymakers a mixed picture to weigh as they decide their next move.

For now, economists broadly agree the June numbers represent a step forward just not a decisive one. The youth job market’s strong start to summer offers a genuine bright spot, but with manufacturing, agriculture and construction still under pressure, Canada’s broader economic recovery remains uneven at best.