Canada saw a rise of 75,000 jobs in July, marking a 0.4% increase and driving the unemployment rate down to 6.4%, its lowest level in two years. Statistics Canada’s latest labor force survey revealed that the job gains were primarily in full- and part-time positions, notably in the wholesale and retail trade sector, which added 21,000 new jobs.
Employment growth was particularly strong among individuals aged 25 to 54, with women in this age group experiencing the most significant increase. The unemployment rate remained steady at 5.8% for men aged 25 to 54 but dropped to 5.2% for women in the same category.
In terms of provincial job gains, Ontario led the way with 52,000 new jobs, a 0.6% increase, primarily driven by growth in the professional, scientific, and technical services sector. British Columbia also saw a notable increase, adding 18,000 jobs.
Manitoba and Nova Scotia experienced job rate increases of 0.8%, adding 5,900 and 4,600 new jobs, respectively. Statistics Canada reported a total of 181,000 jobs added since April and 196,000 compared to the previous year. This positive trend in employment follows similar growth seen in May and June.
Economists, including CIBC’s Andrew Grantham, noted that the job numbers exceeded expectations, attributing the robust hiring in July to the surge in employment. The youth job market, particularly for students aged 15 to 24, showed strength, with the lowest unemployment rate 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 of 6.4% is at a two-year low, economists caution that it remains above the level associated with full employment. BMO’s chief economist, Douglas Porter, highlighted that despite positive employment trends, wage increases have slowed down to 2.8% year over year, the slowest rate in four years.
Looking ahead, economists are optimistic about businesses navigating trade-related uncertainties, with Canada seeking relief from tariffs imposed by the U.S. Talks on trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the fall amidst ongoing trade negotiations and potential tariff threats.