Canada saw an increase of 75,000 jobs in July, marking a 0.4 percent rise and leading to a drop in the unemployment rate to 6.4 percent, the lowest in two years. Statistics Canada’s recent labor force survey revealed that 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 levels went up for individuals aged 25 to 54, particularly for women in that age group. The unemployment rate for men aged 25 to 54 remained stable at 5.8 percent, while it decreased to 5.2 percent for women in the same category. Ontario recorded the highest job addition among provinces in July, adding 52,000 jobs, mainly in the professional, scientific, and technical services sector. British Columbia also experienced a similar surge, with 18,000 new jobs.
Manitoba’s employment rate rose by 0.8 percent, with the addition of 5,900 new jobs, while Nova Scotia saw a similar increase of 0.8 percent, adding 4,600 jobs. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to the previous year. This positive trend in employment follows encouraging job reports from May and June.
According to Laura Ulrich, the director of economic research at Indeed, the consecutive months of positive employment growth signal a potential turning point. CIBC senior economist Andrew Grantham noted that the job numbers exceeded expectations due to robust hiring in July. He highlighted that the youth job market, especially for those aged 15 to 24, showed strength, with the lowest unemployment rate since early 2024.
However, there were disparities among racialized youth, with higher unemployment rates observed for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth. While the overall unemployment rate of 6.4 percent is at its lowest in two years, it is still slightly higher than what is considered full employment.
BMO chief economist Douglas Porter pointed out that the growth in Canada’s labor force has been modest over the past year, which has contributed to reducing the unemployment rate. Although positive trends in employment are evident, there has been a slowdown in average hourly wage increases, which could impact economic dynamics.
Looking ahead, economists foresee potential challenges due to looming tariffs that could affect the recent job gains. Despite signs of stabilization in the labor market, ongoing trade-related uncertainties pose risks to economic growth. Talks on trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the coming months.