Canada saw a rise of 75,000 jobs in July, marking a 0.4% increase and bringing the unemployment rate down to 6.4%, the lowest in two years. Statistics Canada’s recent labor force survey revealed that most of these job gains were evenly distributed between full-time and part-time positions, with the wholesale and retail trade sector alone adding 21,000 new jobs.
Employment growth was particularly notable among individuals aged 25 to 54, especially women in that age bracket. While the unemployment rate for men aged 25 to 54 remained at 5.8%, it 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 sector. British Columbia also experienced a similar increase, adding 18,000 new jobs.
Manitoba and Nova Scotia both saw employment rate increases of 0.8%, adding 5,900 and 4,600 new jobs, respectively. Since April, Canada has added 181,000 jobs, with a total of 196,000 jobs added compared to the previous year. This positive trend in employment follows favorable job reports in May and June.
The job market exceeded expectations, with a notable increase in hiring during July according to CIBC senior economist Andrew Grantham. The summer job market for students was reported to be stronger than in the past two years, and the unemployment rate for individuals aged 15 to 24 was at its lowest since early 2024. However, the unemployment rates varied among racialized youth, with higher rates for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
Despite the overall unemployment rate dropping to 6.4%, Grantham noted that it is still higher than the level considered full employment. BMO chief economist Douglas Porter highlighted that while employment trends are positive, average hourly wage increases have slowed down to 2.8% year over year, the slowest in four years.
Economists suggest that the labor market is stabilizing after a mild contraction in the first quarter. The second quarter likely performed better, with real GDP estimated to have grown by 3.4% on an annualized basis. While recent job numbers indicate businesses are adapting to trade-related uncertainties, there are concerns about potential trade disruptions, including looming tariffs threatened by U.S. President Donald Trump on Canadian imports. Talks on trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the coming months.