Canada saw an increase of 75,000 jobs in July, marking a 0.4 percent rise, and resulting in the unemployment rate dropping to 6.4 percent, its lowest level in two years. According to Statistics Canada’s recent labor force survey, the majority of job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment growth was particularly notable for individuals aged 25 to 54, with women in this age group experiencing significant increases. The unemployment rate for men aged 25 to 54 remained steady at 5.8 percent, while it decreased to 5.2 percent for women in the same category.
In terms of provincial job additions, Ontario led the way by adding 52,000 jobs in July, representing a 0.6 percent increase, mainly driven by growth in the professional, scientific, and technical services sector. British Columbia also saw a notable uptick with 18,000 new jobs.
Manitoba and Nova Scotia experienced employment rate increases of 0.8 percent each, adding 5,900 and 4,600 jobs, respectively. Statistics Canada reported a total of 181,000 new jobs created since April, and 196,000 compared to the previous year. The positive trend in employment growth during July follows similarly encouraging news in May and June.
CIBC senior economist Andrew Grantham highlighted that the job numbers surpassed expectations, attributing the robust hiring in July as the primary factor. He noted a positive trend in the student summer job market, describing it as the strongest in the past two years, with the unemployment rate for young people (ages 15 to 24) reaching its lowest level since early 2024.
Despite the overall unemployment rate dropping to 6.4 percent, Grantham emphasized that it remains slightly higher due to the workforce not being at full employment levels. BMO chief economist Douglas Porter noted that while there have been positive trends in employment, average hourly wage increases have slowed down to 2.8 percent year over year, the slowest rate in four years.
Looking ahead, economists suggested that the labor market appears to be stabilizing after a mild contraction in the first quarter, with businesses showing resilience amid trade-related uncertainties. However, looming tariffs, including U.S. President Donald Trump’s threats of imposing tariffs on Canadian imports, could potentially impact the job market. Canada is actively seeking solutions to address these challenges, including negotiations on trade agreements and seeking relief from sectoral tariffs on key industries.