Canada saw a growth of 75,000 jobs in July, marking a 0.4% increase, while the unemployment rate dropped to 6.4%, its lowest point in two years. Statistics Canada’s recent labor force survey highlighted that the majority of these job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment levels increased for individuals aged 25 to 54, particularly for women in that age bracket. In terms of specific demographics, the unemployment rate remained steady at 5.8% for men aged 25 to 54 but decreased to 5.2% for women in the same group. Ontario led in job creation among provinces, adding 52,000 jobs (0.6% increase), mainly in the professional, scientific, and technical services industry. British Columbia also experienced a notable rise with 18,000 new jobs.
Manitoba’s employment rate surged by 0.8%, adding 5,900 new positions, while Nova Scotia recorded a similar increase of 0.8%, resulting in 4,600 additional jobs. Since April, the country has gained 181,000 jobs, and compared to the previous year, there have been 196,000 more job opportunities. July’s uptick in employment follows positive trends observed in May and June.
Andrew Grantham, a senior economist at CIBC, noted that the job numbers exceeded expectations due to robust hiring in July. The summer job market for students was reported to be stronger than in the past two years, with the unemployment rate for young people (15-24 years old) at its lowest since early 2024. However, disparities were evident 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 hitting a two-year low at 6.4%, Grantham pointed out that it remains half a percentage point higher than what is considered full employment. This indicates that unemployment levels are not conducive to driving domestic inflation. BMO chief economist Douglas Porter highlighted that while positive trends in employment are observed, average hourly wage increases have slowed down to 2.8% year over year, the slowest rate in four years.
Economists observed signs of stabilization in the labor market following a mild contraction in the first quarter, with businesses adapting to trade-related uncertainties. However, looming tariffs pose a potential threat to these gains, with U.S. President Donald Trump threatening 50% tariffs on Canadian imports. Negotiations on trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the fall, amid ongoing efforts to address trade challenges and promote economic stability.