Canada saw an increase of 75,000 jobs in July, marking a 0.4% rise and bringing the unemployment rate down to 6.4%, its lowest level in two years. Statistics Canada’s recent labor force survey highlighted that the majority of job gains were in both full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment growth was notable among individuals aged 25 to 54, particularly women in that age group. While the unemployment rate remained steady at 5.8% for men aged 25 to 54, it dropped to 5.2% for women in the same category. Ontario led in job creation among provinces, adding 52,000 jobs (a 0.6% uptick), 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 saw their employment rates rise by 0.8%, adding 5,900 and 4,600 new jobs, respectively. Overall, Canada has gained a total of 181,000 jobs since April and 196,000 compared to the previous year. The positive momentum in July follows strong job reports in May and June.
Senior economist Andrew Grantham from CIBC noted that the job numbers surpassed expectations, attributing the growth to robust hiring in July. He also highlighted the strength of the student summer job market, which has been 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 hitting a two-year low at 6.4%, Grantham mentioned that it is still slightly higher than full employment levels. BMO chief economist Douglas Porter pointed out that Canada’s labor force has only grown by less than 8,000 jobs per month over the past year, emphasizing that even modest job gains have a notable impact on reducing the jobless rate.
Looking ahead, economists are optimistic about the labor market’s stability, although uncertainties remain due to potential trade disruptions. Talks regarding the Canada-United States-Mexico Agreement are set to resume in the fall, while looming tariffs threaten to affect the recent job gains. Canada is seeking relief from tariffs on various industries, including steel and aluminum, as discussions with the U.S. continue.