Canada saw an increase of 75,000 jobs in July, marking a 0.4% rise, while the unemployment rate dropped to 6.4%, reaching its lowest point in two years. Statistics Canada’s latest labor force survey revealed that most of the 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 saw growth for individuals aged 25 to 54, particularly among women in that age bracket. In the same period, the unemployment rate remained constant at 5.8% for men aged 25 to 54, but decreased to 5.2% for women in that group. Ontario led in job creation among provinces, adding 52,000 jobs, mainly in the professional, scientific, and technical services sector. British Columbia also experienced a notable increase with 18,000 new jobs.
Manitoba and Nova Scotia both saw employment rate rises of 0.8%, adding 5,900 and 4,600 jobs respectively. Overall, Canada has accumulated 181,000 more jobs since April and 196,000 compared to the previous year. The positive trend in employment in July follows similar good news from May and June.
According to Laura Ulrich, director of economic research at Indeed, the consistent upward trajectory in job creation in the past three months is indicative of a potential turning point. She expressed optimism that if the broad-based growth seen in July continues into the autumn, it could signify the momentum Canada has been anticipating.
The surge in job numbers exceeded expectations, with CIBC senior economist Andrew Grantham attributing it to robust hiring in July. The student summer job market was reported to be stronger than in the past two years, with unemployment among young people, aged 15 to 24, at its lowest since early 2024. However, disparities were noted in the unemployment rates for racialized youth, with rates varying among different ethnic groups.
While Canada’s overall unemployment rate of 6.4% is at its lowest in two years, Grantham highlighted that it remains half a point higher than what is considered full employment. BMO chief economist Douglas Porter noted a modest increase in the labor force over the past year, emphasizing that even slight job gains can impact the unemployment rate.
Despite positive employment trends, average hourly wage growth has slowed down to 2.8% year over year, marking the slowest rate in four years and aligning with pre-pandemic patterns. Economists suggest that while the labor market appears to be stabilizing, potential trade disruptions, such as looming tariffs, could affect these recent gains. Talks regarding the Canada-United States-Mexico Agreement are set to resume in the fall, amid ongoing trade-related uncertainties and negotiations.