Canada saw a rise of 75,000 jobs in July, marking a 0.4 percent increase, which led to a decline in the unemployment rate to 6.4 percent, the lowest in two years. Statistics Canada’s recent labor force survey revealed that the majority of these job gains were evenly distributed between full-time and part-time employment, notably in the wholesale and retail trade sector which saw an addition of 21,000 new jobs.
The employment growth was particularly prominent among individuals aged 25 to 54, with a significant uptick in job opportunities for women in that age bracket. While the unemployment rate remained stable at 5.8 percent for men aged 25 to 54, it decreased to 5.2 percent for women in the same group.
Ontario led the provinces in job creation in July, adding 52,000 jobs, a 0.6 percent increase, primarily in the professional, scientific, and technical services industry. British Columbia also experienced a notable rise with 18,000 new jobs being added.
Manitoba and Nova Scotia also saw positive employment trends, with Manitoba’s job rate increasing by 0.8 percent, adding 5,900 new jobs, and Nova Scotia experiencing a similar boost of 0.8 percent, thanks to the addition of 4,600 jobs.
Statistics Canada reported a total increase of 181,000 jobs since April and 196,000 compared to the previous year. This uptrend in employment in July follows favorable job reports in May and June.
Andrew Grantham, a senior economist at CIBC, noted that the job figures surpassed expectations due to robust hiring in July. The youth job market, particularly for individuals aged 15 to 24, also showed improvement, with the unemployment rate being the lowest since early 2024. However, disparities were observed among racialized youth, with higher unemployment rates reported for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
Although the overall unemployment rate of 6.4 percent is at its lowest level in two years, economists caution that Canada’s labor force is still not at full employment, which could impact inflation. Positive employment trends are somewhat offset by a slowdown in average hourly wage growth, which decreased to 2.8 percent year over year.
Looking ahead, economists anticipate potential challenges due to looming tariffs, including U.S. President Donald Trump’s threats of imposing 50 percent tariffs on Canadian imports. Despite these uncertainties, businesses are adapting, as evidenced by the improving job market. Negotiations on trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the fall.
