Canada saw a notable increase in employment in July, adding 75,000 jobs, representing a 0.4% rise, and leading to a reduction in the unemployment rate to 6.4%, the lowest in two years, according to Statistics Canada’s recent labor force survey. The majority of these job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sectors contributing 21,000 new jobs.
Employment surged among individuals aged 25 to 54, particularly women in this age group. While the unemployment rate remained stable at 5.8% for men aged 25 to 54, it dropped to 5.2% for women in the same category. Ontario experienced the highest job growth in July, adding 52,000 jobs, mainly in the professional, scientific, and technical services sector. Similarly, British Columbia recorded an increase with 18,000 new jobs.
Manitoba’s employment rate rose by 0.8%, adding 5,900 new jobs, while Nova Scotia saw a similar increase of 0.8%, resulting in 4,600 new jobs. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to the previous year. The positive trend in July follows promising job reports from May and June.
Senior economist Andrew Grantham from CIBC noted that the job numbers exceeded expectations due to robust hiring in July. The summer job market for students was reported to be stronger than the past two years, with the unemployment rate for individuals aged 15 to 24 reaching its lowest point since early 2024. However, disparities were observed among racialized youth, with varying unemployment rates.
Although the overall unemployment rate of 6.4% is the lowest in two years, it remains slightly higher than what is considered full employment. Economists emphasized that while the job market is showing positive signs, wage growth has slowed down to 2.8% year over year, the slowest in four years, indicating a return to pre-pandemic trends.
Despite the positive employment figures, looming tariffs could potentially impact these gains. The labor market is seen as stabilizing after a mild contraction in the first quarter of the year. Canada’s economy is estimated to have grown by 3.4% in the second quarter. Yet, concerns arise over potential trade disruptions, such as U.S. President Donald Trump’s proposed 50% tariffs on various Canadian imports. Negotiations on trade agreements with the U.S. and Mexico are set to resume in the coming months.
The recent job report indicates a significant uptick in employment, showcasing a positive trajectory for Canada’s labor market.
