Canada Unemployment Rate Unexpectedly Drops

The unemployment rate in Canada fell to 6.4% in July of 2026 from 6.5% in the previous month, under market expectations that it would remain unchanged, to mark the lowest jobless rate in two years. Net employment rose by 75,100, well above market expectations of a 15,000 increase, to mark a third straight rise in jobs. Meanwhile unemployment fell by 14,500 to 1,455,000. The unemployment rate fell to a record low of 5.2% for core-aged women, firmly below that for core-aged men (5.8%). Meanwhile, the youth unemployment rate fell to 12.6% from 12.7% in the previous month. The rise in net jobs and drop in unemployment corresponded to a 0.1 percentage point increase in the labor force participation rate to 65.1%, the highest so far this year.

The unemployment rate in Canada eased to 6.5% in June of 2026 from 6.6% in the previous month, below market expectations that it would remain unchanged and tying for the lowest since July of 2024. Net employment rose by 18,000 positions to 21,139,700, mostly supported by part-time positions. In the meantime, unemployment fell by 13,200 to 1,469,200. This was aligned with a job finding rate, which is the proportion of unemployed who found a position since May, to 24.3%. The developments translated to an unchanged labor force participation rate of 65.0%, which has remained relatively steady since the start of the year despite the energy supply shocks due to the war in Iran and the exchange of tariffs with the United States.

The unemployment rate in Canada fell to 6.6% in May of 2026 from 6.9% in the previous month, the lowest since January and firmly below market expectations that it would remain at 6.9%. The result reflected some fresh resilience in the Canadian labor market after concerns that high energy prices, restrictive interest rates, and tariff exchanges with the US would hamper the domestic job market. The number of unemployed people fell by 84,000 to 1,482,400, with reductions seen for both core aged women and core aged men. In the meantime, net employment surged by 87,800 to 21,121,500, well above market expectations of a 10,000 increase to mark the sharpest job growth since December of 2024. A large portion of the gain in net employment was through job gains on the unemployed population, as the labor force participation rate remained unchanged from the previous month at 65%.