Canada saw an increase of 75,000 jobs in July, marking a 0.4% rise, and the unemployment rate dropped to 6.4%, the lowest in two years, according to Statistics Canada’s latest labor force survey. The majority of the job gains were in both full-time and part-time positions, with the wholesale and retail trade sector alone adding 21,000 new jobs.
Employment saw a rise among individuals aged 25 to 54, particularly for women in that age bracket. In this group, the unemployment rate remained at 5.8% for men but decreased to 5.2% for women. Ontario led in job creation among provinces, adding 52,000 jobs (0.6% increase), primarily in the professional, scientific, and technical services sector. British Columbia also experienced a notable increase with 18,000 new jobs.
Manitoba’s employment rate surged by 0.8%, adding 5,900 jobs, while Nova Scotia saw a similar 0.8% increase, adding 4,600 jobs. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to the previous year. The positive trend in July follows the encouraging job reports in May and June.
The unexpected job growth in July, exceeding forecasts, was attributed to robust hiring, as noted by CIBC senior economist Andrew Grantham. The youth job market, especially for ages 15 to 24, showed strength, with the summer job market for students being the strongest in two years and the youth unemployment rate at its lowest since early 2024.
Despite the overall unemployment rate dropping to 6.4%, economists point out that it remains slightly higher than full employment levels. BMO chief economist Douglas Porter highlighted that although the labor force has grown modestly over the past year, the jobless rate has decreased due to consistent job gains. However, he mentioned a slowdown in average hourly wage growth, which now stands at 2.8% year over year, the slowest in four years.
Looking ahead, economists are cautiously optimistic about trade-related uncertainties, as businesses navigate potential challenges. The looming threat of tariffs from the U.S. on Canadian imports could impact these gains, with ongoing negotiations and discussions regarding trade agreements and tariffs between Canada, the United States, and Mexico.
The Canadian economy is showing signs of resilience, with businesses adapting to trade uncertainties, as indicated by the recent positive job numbers. The government is actively seeking solutions to potential trade disruptions, emphasizing the importance of international trade relations in maintaining economic stability.