EconoFACTS

July 11, 2025 | 09:16

Cdn. Employment (June) — Hot Start to Summer

Economist

Managing Director, Canadian Rates & Macro Strategist
Fixed Income Strategy

Benjamin has been with the Bank of Montreal nearly two decades. He is re-sponsible for the Canadian macro-econom... (Read more)

Benjamin Reitzes

Managing Director, Canadian Rates & Macro Strategist
Fixed Income Strategy

Benjamin has been with the Bank of Montreal nearly two decades. He is re-sponsible for the Canadian macro-econom... (Read more)

Canadian employment surged 83,100 in June, not on the same planet as the consensus call for a flat reading. The details were pretty decent overall. One arguable blemish is that most of the gains were in part-time jobs. No matter how you slice things, this report is materially better than expected. The unemployment rate fell a tick to 6.9%, even as the participation rate rose a tick to 65.4%. Notably, age 25-54 employment rose 90,600 (which is the largest increase on record excluding the 2020-2022 pandemic distortion), lowering their jobless rate to 5.8%, reversing May's increase.

Private-sector jobs rose 46.6k, the public sector was up 23.4k, with the balance in self-employed. On a sector basis, manufacturing rose 10.5k, breaking a four-month losing streak. The other big winners were wholesale/retail, health/personal care, and professional services. There were small losses in other services, agriculture and transportation/warehousing.

Hours worked were solid, up 0.5% m/m, leaving them up 1.3% annualized for the quarter. Perhaps GDP will bounce back in June, but Q2 is still tracking negative, suggesting productivity was much softer too. Wage growth slowed to 3.2% y/y, which was the high end of the pre-pandemic range and reflects broader labour market slack, even if June was firm.

Regionally, Alberta, Ontario and Quebec accounted for the bulk of job gains, while Atlantic Canada was a soft spot. Ontario's jobless rate slipped a tick to 7.8%, still well above the national average and the highest among the larger provinces. That comes in sharp contrast to B.C., where a big decline in the labour force pulled the unemployment rate down 0.8 ppts to 5.6%, third lowest in the country behind Saskatchewan (4.9%) and Manitoba (5.5%).

Key Takeaway: This is a very solid report, especially compared to expectations for material weakness. Given the uncertainty hanging over the Canadian economy, many (including us) will be skeptical of this report. Even so, it appears that the economy is hanging in there for now, pending the result of ongoing trade negotiations. Barring a sharp decline in underlying inflation in next week's June CPI report (which looks unlikely), the strength in today's jobs data and the recently heightened uncertainty on the trade front likely keep the BoC on the sidelines when it meets later this month.

Table 1 - Canada — Employment

(change in thousands)

Source: BMO Economics, Haver Analytics