Is the labour market loosening?
Latest release LFS, Jun 2026
Less than before. Canada added 18,200 jobs in June and the unemployment rate eased to 6.5%, while the employment rate rose to 60.8% and participation held at 65.0%. Hours worked barely moved and LFS-Micro wage growth is still running at 2.6%, so the print looks like a modest firming rather than a broad labour-market re-acceleration.
Plate 01 Monthly job change and the unemployment rate
As of Jun 2026
Hiring rebounded across most of the economy in May.
The May surge was broad, not a one-industry fluke: most sectors added jobs, and the gains landed in full-time work rather than part-time. Breadth that wide is what separates a real turn from statistical noise. It lifts employment to its highest level this calendar year, though still about 25,000 short of December's peak.
Plate 02 Labour-force stocks as shares of working-age population
As of Jun 2026
The employed share rose in May, pausing the slide into non-participation.
The employed share of the working-age population climbed to 60.7% in May as the unemployed share fell to 4.3%. For much of this cycle, a fast-growing population had been landing outside the labour force rather than in jobs; that absorption paused this month. Participation held at 65.0%, so the gain came from filling the existing labour force, not from people stepping away.
Plate 03 Aggregate hours worked vs employment, Y/Y
As of Jun 2026
Hours are recovering, but still trail the headcount rebound.
Hours are recovering, yet they trail the jobs count: aggregate hours are up just 0.3% Y/Y against 0.7% for employment. The gap means firms added bodies faster than they added work for them to do. Until hours catch up, the recovery in headcount overstates how much demand for labour has actually firmed.
Plate 04 Composition-adjusted vs headline wage growth, Y/Y
As of Mar 2026 (LFS-Micro) / May 2026 (LFS-all)
Wage growth cooled sharply in May, but the cleaner read isn't in yet.
Headline wage growth fell to 3.0% Y/Y in May, down from 4.5% in April. But the headline mixes raw pay gains with shifts in who is working. The composition-adjusted measure, LFS-Micro, last read 3.1% in March and has no May figure yet. Whether the cooling is genuine or just a change in the workforce awaits the next reading.
Plate 05 Vacancy and unemployment rate over time, plus the spread
As of Mar 2026
A deep-slack regime in the stock of jobs has held for over three years.
The vacancy rate sat at 2.8% in March against a 6.7% unemployment rate that month, leaving vacancies 3.9 percentage points short of the people looking for work. That spread has been negative without a break since November 2022 — there are fewer open jobs than jobseekers, and have been for over three years. This is the honest tension with May's hiring pop: flows can turn in a single month, but the standing pool of slack in the job market is still deep.
Plate 06 Job finding and separation rates, monthly transition probabilities
As of Apr 2026
Layoffs never spiked — the weak spot has been a slow hiring rate.
This was never a layoff problem; the weak spot was always slow hiring—and that side is now turning. Separations held at 2.0% in April, near their pre-pandemic norm, as they have all cycle: no spike, ever. The finding rate, meanwhile, jumped to 32.4% from 27.8% in March—the hiring channel thawing before May's +87.8k blowout confirmed it.