a summertime hiring spree

The latest Labour Force Survey (LFS) data release from Statistics Canada, for June 2025, showed some encouraging signs: after only adding a total of 60,700 jobs through the first five months of the year, Canada saw employment grow by 83,100 last month alone.

The month-to-month changes in the LFS are notoriously volatile and should generally be taken with a grain of salt. That said, the improvement in the employment data was broad-based, with most of the other useful labour market metrics showing positive changes in June as well. Job growth exceeded labour force growth, which meant that the number of unemployed persons fell (by 22,100). Labour force participation and the employment rate (the latter denoting the total share of the population that’s working) both ticked up, to 65.4% and 60.9%, respectively, while the unemployment rate fell for the first time in five months, to 6.9%.

Having said all of this, and if there's one thing to nitpick, the majority of job growth (84% of June's additions) was in part-time employment. The breakdown of why people are working part-time shows that the largest share of growth in part-time work came from those who wanted to work full-time but were unable (these data are not seasonally-adjusted so the numbers are a little different). This suggests that the improvement in labour market conditions in June wasn’t quite as strong as the top-line job number indicated, with many workers not able to get their desired outcomes.

The magnitude of overall job growth last month, as well as the directional change to the unemployment rate, are welcome news after a sustained period of labour market deterioration. While it remains to be seen whether June is the beginning of a change in trend or simply volatility in the LFS data, this new set of job numbers reduces the likelihood of an interest rate cut by the Bank of Canada at its next announcement on July 30th. At 6.9%, however, the unemployment rate remains elevated and this reality will factor into the Bank’s decision. The Bank will also have to consider the June Consumer Price Index update (released on July 15th) after headline inflation in May remained in check despite core measures being elevated, as well as the latest round of tariff threats from the United States (the newest new deadline for a Canada-US trade agreement is now August 1st).