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Canada labour market stabilizes as unemployment edges to 6.5%

RBC expects more unemployment declines later in 2026, citing softer population growth, firmer data and lower U.S. tariff rates as supports.

Reported · Written up by our desk · EM Currencies

Royal Bank of Canada economist Nathan Janzen says Canada’s labour market showed further signs of stabilization in June after a stronger improvement in May. Employment rose modestly, per-worker conditions improved, and the unemployment rate edged down to 6.5%.

Janzen pointed to a mix of factors behind the turn, including softer population growth, firmer economic data, and lower U.S. tariff rates. He said these supports align with expectations for continued labour improvement.

Looking ahead, RBC expects further declines in unemployment later in 2026, as the labour market continues to steady.

The commentary came as FXStreet also noted broader currency and macro expectations in the week, with attention on Bank of Canada expectations and potential pressure from U.S. data and yields.

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