Canada saw a rise of 75,000 jobs in July, representing a 0.4% increase, leading to a decline in the unemployment rate to 6.4%, the lowest in two years, according to Statistics Canada’s recent labor force survey. The majority of these job gains were divided between full-time and part-time positions, with the wholesale and retail trade sector alone adding 21,000 new jobs.
Employment notably increased for individuals aged 25 to 54, particularly among women in that age bracket. While the unemployment rate remained steady at 5.8% for men aged 25 to 54, it decreased to 5.2% for women in the same group. Ontario emerged as the top job creator among provinces in July, adding 52,000 jobs, primarily in the professional, scientific, and technical services sector. British Columbia also experienced a similar upturn with 18,000 new jobs.
Manitoba witnessed a 0.8% increase in employment, adding 5,900 new jobs, whereas Nova Scotia’s employment rate surged by 0.8% due to the addition of 4,600 jobs. Since April, Canada has generated 181,000 new jobs and 196,000 compared to the previous year. This positive employment trend in July follows the encouraging job reports from May and June.
CIBC senior economist Andrew Grantham noted that the job numbers surpassed expectations, attributing this to robust hiring in July. The summer job market for students was particularly strong, with the unemployment rate for young people aged 15 to 24 hitting its lowest point 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 hitting a two-year low at 6.4%, Grantham highlighted that it still remains half a point higher than full employment levels. BMO chief economist Douglas Porter pointed out that while employment trends are positive, average hourly wage growth has slowed down to 2.8% year over year, the slowest in four years.
Economists suggest that the labor market is stabilizing, with businesses adapting to trade-related uncertainties. However, looming tariffs, including U.S. President Donald Trump’s threats of imposing 50% tariffs on Canadian imports, could impact these gains. Canada is advocating for the removal of these tariffs and is engaged in negotiations to address trade-related challenges. Talks on the Canada-United States-Mexico Agreement are also set to resume in the upcoming fall.