Canada saw a growth of 75,000 new jobs in July, marking a 0.4 percent increase and lowering the unemployment rate to 6.4 percent, its lowest level in two years. The latest data from Statistics Canada’s labor force survey revealed that the majority of these job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sector alone contributing 21,000 new jobs.
Employment saw an uptick among individuals aged 25 to 54, particularly among women in that age bracket. While the unemployment rate remained steady at 5.8 percent for men aged 25 to 54, it dropped to 5.2 percent for women in the same group. Ontario led the provinces with the most job additions in July, adding 52,000 jobs (a 0.6 percent increase), primarily in the professional, scientific, and technical services industry. British Columbia also experienced a similar surge, adding 18,000 new jobs.
Manitoba recorded a 0.8 percent rise in employment, creating 5,900 new jobs, while Nova Scotia saw a similar increase of 0.8 percent, adding 4,600 jobs. Since April, Canada has witnessed an increase of 181,000 jobs, and compared to the previous year, there has been a surge of 196,000 jobs. The positive employment trend in July follows favorable job reports in May and June.
According to Laura Ulrich, the director of economic research at Indeed, the consecutive monthly growth signifies a potential turning point in the job market, suggesting a momentum shift for Canada if the broad employment gains seen in July continue into the fall. CIBC senior economist Andrew Grantham noted that the job numbers exceeded expectations, attributing the robust hiring in July for the significant increase. He also highlighted the stronger summer job market for young people, with the unemployment rate for individuals aged 15 to 24 hitting its lowest point since early 2024.
However, the unemployment rates varied among racialized youth, with Black youth facing a 22.6 percent unemployment rate, compared to 15.4 percent for Chinese youth and 13.9 percent for South Asian youth. In contrast, non-racialized and non-Indigenous youth had an unemployment rate of 11.6 percent in July. Despite the overall unemployment rate dropping to 6.4 percent, Grantham emphasized that it is still higher than what is considered full employment, indicating that it may not lead to domestic inflation.
BMO chief economist Douglas Porter highlighted that while the employment trends and job findings are positive, the average hourly wage growth has slowed down to 2.8 percent year over year, the slowest rate in four years, aligning with pre-pandemic levels. Economists have noted that the labor market has been stabilizing after a mild contraction in the first quarter, with businesses adapting to trade-related uncertainties. The looming threat of tariffs, particularly U.S. President Donald Trump’s proposal of 50 percent tariffs on Canadian imports effective August 19, could impact Canada’s economic gains.
Amid the uncertainties, Canada is advocating for the removal of tariffs and negotiating trade agreements to maintain economic stability and support job growth.