Canada saw a rise of 75,000 jobs in July, marking a 0.4 per cent increase, while the unemployment rate dropped to 6.4 per cent, reaching its lowest level in two years. According to Statistics Canada’s recent labor force survey, the majority of these new jobs were divided between full-time and part-time positions, with the wholesale and retail trade sector alone contributing 21,000 jobs.
Employment growth was particularly notable among individuals aged 25 to 54, especially women in that age bracket. In this group, the unemployment rate remained steady at 5.8 per cent for men aged 25 to 54 but decreased to 5.2 per cent for women. Ontario led the way in job creation among provinces, adding 52,000 jobs in July, primarily in the professional, scientific, and technical services sector. British Columbia also experienced a significant increase with 18,000 new jobs.
Manitoba and Nova Scotia saw employment rates rise by 0.8 per cent, adding 5,900 and 4,600 jobs, respectively. Since April, Canada has gained 181,000 jobs and 196,000 jobs compared to the previous year. This positive trend in employment follows strong job reports in May and June.
The surge in job numbers surpassed expectations, with CIBC senior economist Andrew Grantham attributing it to robust hiring in July. The summer job market for students was notably strong, with the youth unemployment rate (ages 15 to 24) reaching 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.
While the overall unemployment rate of 6.4 per cent is the lowest in two years, economists caution that it is still higher than the level indicative of full employment. BMO chief economist Douglas Porter highlighted the modest growth in Canada’s labor force over the past year and the slowdown in average hourly wage increases. Despite positive employment trends, wage growth has decelerated to 2.8 per cent year over year, the slowest in four years.
Looking ahead, economists suggest that looming tariffs could impact the recent job gains. While the labor market appears to be stabilizing, trade-related uncertainties persist, including potential tariffs on Canadian imports from the U.S. Canada is advocating for tariff reductions and seeking relief from sectoral tariffs as trade negotiations continue. Discussions on the Canada-United States-Mexico Agreement are set to resume in the fall.