Canada saw a rise of 75,000 jobs in July, marking a 0.4 percent increase and bringing the unemployment rate down to 6.4 percent, its lowest level in two years. Statistics Canada’s recent labor force survey indicated that the majority of these job gains were evenly split between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment growth was particularly notable among individuals aged 25 to 54, especially for women in this age bracket. In this group, the unemployment rate remained steady at 5.8 percent for men and dropped to 5.2 percent for women. Ontario led job creation among provinces, adding 52,000 jobs, mainly in the professional, scientific, and technical services industry. British Columbia also saw a significant increase, adding 18,000 new jobs.
Manitoba experienced a 0.8 percent uptick in employment, adding 5,900 jobs, while Nova Scotia saw a similar increase, gaining 4,600 jobs. Overall, Canada has added 181,000 jobs since April and 196,000 compared to the previous year. The positive job growth trend in July follows the encouraging employment reports from May and June.
Economists were pleasantly surprised by the job numbers, with CIBC’s senior economist Andrew Grantham noting that the robust hiring in July exceeded expectations. The summer job market for students was reported to be stronger than in the past two years, leading to the lowest unemployment rate for young individuals aged 15 to 24 since early 2024.
While the overall unemployment rate of 6.4 percent is the lowest in two years, economists point out that it remains slightly higher than what is considered full employment. BMO’s chief economist Douglas Porter highlighted that although employment trends are positive, average hourly wage increases have slowed down to 2.8 percent year over year, the slowest in four years.
Looking ahead, economists are optimistic about the labor market’s stability, noting that businesses are adapting well to trade-related uncertainties. However, looming tariffs, including U.S. President Donald Trump’s threats of imposing 50 percent tariffs on Canadian imports, could potentially impact the current job gains. Canada is actively negotiating to avert these tariffs and seeking relief from sectoral tariffs on key industries like steel and aluminum. Talks under the Canada-United States-Mexico Agreement are also set to resume in the upcoming fall.
