Canada saw a rise of 75,000 jobs in July, representing a 0.4% increase, leading to a decline in the unemployment rate to 6.4%, the lowest in two years. The latest labor force survey from Statistics Canada revealed that the majority of these job gains were divided between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment growth was particularly notable among individuals aged 25 to 54, especially women within that age bracket. In this group, the unemployment rate remained steady at 5.8% for men but dropped to 5.2% for women. Notably, Ontario experienced the largest job increase among provinces, adding 52,000 jobs, primarily in the professional, scientific, and technical services sector. British Columbia also saw substantial growth with 18,000 new jobs.
Manitoba’s employment rate surged by 0.8%, adding 5,900 new jobs, while Nova Scotia saw a similar increase of 0.8%, thanks to the addition of 4,600 jobs. Since April, Canada has gained 181,000 jobs and 196,000 compared to the previous year. This positive trend in July follows encouraging job reports from May and June.
The surge in job numbers surpassed expectations, with CIBC senior economist Andrew Grantham attributing it to robust hiring in July. The summer job market for students was notably strong, with youth unemployment, ages 15 to 24, reaching its lowest level since early 2024. However, disparities were observed among racialized youth, with higher unemployment rates for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
While the overall unemployment rate stands at 6.4%, its lowest in two years, economists caution that it remains slightly higher than full employment levels. BMO chief economist Douglas Porter noted that despite positive employment trends, average hourly wage growth has slowed to 2.8% year over year, the slowest in four years. Additionally, looming tariffs imposed by the U.S. could potentially impact Canada’s recent job gains.
Despite challenges on the trade front, the Canadian labor market appears to be stabilizing, with businesses adapting to trade-related uncertainties. The economy is showing signs of improvement, with real GDP estimated to have grown by 3.4% in the second quarter. Discussions around trade negotiations and potential tariffs continue, with Canada advocating for the removal of tariffs on various imports and seeking relief from sectoral tariffs on key industries like steel and aluminum.
Overall, the recent job market performance in Canada has been robust, signaling positive momentum for the country’s economic landscape.