The FIFA World Cup and a better summer jobs market for young workers appeared to drive steady gains in Canada's labour market last month.
Employers added 18,000 jobs in June, Statistics Canada said Friday, mostly in part-time and private sector work.
That pushed the unemployment rate down a tenth of a point to 6.5 per cent, back to where it stood in January.
Employment gains narrowly topped economists’ expectations heading into the release but mark a slowdown from the 88,000 jobs added in May.
Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, said the labour market is stabilizing after a rough start to the year.
Employers collectively shed more than 100,000 positions in the first four months of 2026, leaving net growth "somewhat flat" this year, he said.
"It goes to show you that economic activity more broadly is rebounding from a very weak first quarter that really caught a lot of economists and Canadians by surprise," DiCapua said.
StatCan said workers aged 15 to 24 added 33,000 jobs last month, coming off what's been a tough labour market for youth. Workers aged 25 to 54 saw similar gains while older members of the labour market faced losses.
Overall growth was concentrated in part-time work as well as the food and accommodation and retail sectors of the economy, according to StatCan.
Numerous economists weighing in on Friday's data release pointed to the World Cup as driving up hospitality sector hiring in June.
Younger workers in particular were likely taking advantage of openings at bars, hotels and other tourism sector employers when Canada hosted games in June, DiCapua said.
"It really is a story of the World Cup boosting the labour market, in a sense," DiCapua said.
The summer jobs market does seem a little friendlier for youth than last year.
The unemployment rate for returning students — those planning to head back to school in the fall — was 15.3 per cent in June, 2.1 percentage points lower than the same month a year ago. This was still higher than the pre-pandemic average of 13 per cent.
StatCan noted however that job prospects varied widely within this age group.
Returning students aged 20 to 24 saw an unemployment rate of 8.2 per cent in June, while those aged 17 to 19 faced a jobless rate of 16.5 per cent. Teens aged 15 or 16 recorded an unemployment rate of 30.6 per cent in June as they searched for work in the waning days of the school year.
Elsewhere in the economy, manufacturing shed 17,000 positions last month. The industry is down some 61,000 jobs since a recent peak in January 2025 as U.S. tariffs continue to weigh on the sector, StatCan said.
TD Bank economist Maria Solovieva said in a note to clients Friday that manufacturing "remains a poster child of the uncertainty hanging over the Canadian economy."
The June jobs report will be the Bank of Canada's last major look at the state of the economy before making its next interest rate decision on Wednesday.
Solovieva said weakness in trade-exposed sectors of the labour market will help to offset inflationary pressures elsewhere, allowing the Bank of Canada to remain on hold next week.
As of Friday at noon, financial market odds were around 90 per cent in favour of an interest rate hold from the central bank next week, according to LSEG Data & Analytics.
All told, overall employment was up by 99,000 positions year-over-year in June with growth concentrated in the private sector.
Average hourly wages rose 3.3 per cent annually in June, up from three per cent in May.
"The labour market is still not strong — the unemployment rate is still higher than normal. But economic growth data has also shown signs of picking up in Q2 after stalling over the winter," said RBC assistant chief economist Nathan Janzen in a note to clients.
Janzen noted that with population growth slowing, Canadians should get used to seeing smaller employment gains on a monthly basis.
But with the unemployment rate ticking lower, he said June's labour force data support RBC's view that the jobs market is improving on a per-worker basis. He said he expects the unemployment rate will continue to decline through 2026.
DiCapua agreed with Janzen that the labour market is not showing much strength. But with layoff rates holding steady and few signs of further deterioration, he argued the Bank of Canada should be content on the sidelines.
"The labour market is in a decent position, all things considered, and that'll allow the Bank of Canada and the governors to take a summer break," he said.
Picture Courtesy: THE CANADIAN PRESS/Frank Gunn
