According to Royal Bank of Canada (RBC) economist Nathan Janzen, the Canadian labour market demonstrated further signs of stabilization in June, following a stronger improvement in May [1]. Employment increased modestly by 18,000 jobs in June; however, this left the net employment change for the year at a decrease of 6,000 jobs [1]. Despite the modest employment gain, per-worker labour market conditions maintained the larger-than-expected improvement seen in May [1].
The national unemployment rate edged down to 6.5% in June from 6.6% in May, a change attributed primarily to a reduction in the youth unemployment rate, which benefited from an improved summer job market [1]. Janzen noted that the slower pace of employment gains is expected, given the sharp deceleration in Canadian population growth [1]. He also cited softer population growth, firmer economic data, and lower U.S. tariff rates as supportive factors for the labour market [1].
The June labour market data aligns with RBC's base-case scenario that Canada's economy is continuing to improve on a per-person and per-worker basis [1]. Looking ahead, Janzen anticipates that the unemployment rate will continue to edge down further over the second half of the year, with further declines expected later in 2026 [1].
CONCLUSION
Canada's labour market showed modest improvement in June, with the unemployment rate declining to 6.5% and per-worker conditions remaining strong. RBC expects continued gradual recovery and further declines in unemployment through the rest of the year and into 2026.