Canada saw a rise of 75,000 jobs in July, marking a 0.4 percent increase, leading to a decrease in the unemployment rate to 6.4 percent, the lowest in two years. Statistics Canada’s latest labor force survey revealed that the majority of these job gains were evenly distributed between full-time and part-time positions, notably with the wholesale and retail trade sector adding 21,000 new jobs.
The report indicated a surge in employment among individuals aged 25 to 54, particularly for women in that age bracket. While the unemployment rate remained steady at 5.8 percent for men aged 25 to 54, it decreased to 5.2 percent for women in the same group. Ontario recorded the highest job growth among provinces in July, adding 52,000 jobs, primarily in the professional, scientific, and technical services sector. British Columbia also experienced a notable increase with 18,000 new jobs.
Manitoba and Nova Scotia both saw their employment rates rise by 0.8 percent, adding 5,900 and 4,600 new jobs, respectively. Overall, Canada has generated 181,000 jobs since April and 196,000 compared to the previous year. The positive momentum in July follows encouraging job data from May and June.
The job report surpassed expectations, with CIBC senior economist Andrew Grantham noting the robust hiring activity in July. The summer job market for students was reported to be stronger than in the past two years, with the unemployment rate for individuals aged 15 to 24 hitting its lowest level since early 2024. However, disparities were observed among racialized youth, with higher unemployment rates for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
Despite the overall unemployment rate dropping to 6.4 percent, Grantham highlighted that it is still higher than the level considered full employment for Canada. BMO chief economist Douglas Porter pointed out that while the employment trends are positive, the growth in average hourly wages has slowed down to 2.8 percent year over year, the slowest in four years.
Economists noted that the labor market seemed to be stabilizing after a mild contraction in the first quarter, with businesses adapting to trade-related uncertainties. However, looming tariffs, including U.S. President Donald Trump’s threats of imposing 50 percent tariffs on Canadian imports, could impact the gains. Canada is advocating for tariff reductions and seeking relief from sectoral tariffs, while negotiations on the Canada-United States-Mexico Agreement are set to resume in the coming months.