Canada’s job market saw a significant boost in July, with the addition of 75,000 new jobs, marking a 0.4% increase and driving the unemployment rate down to 6.4%, its lowest level in two years. According to Statistics Canada’s latest labor force survey, the majority of job gains were in both full-time and part-time positions, notably in the wholesale and retail trade sector, which added 21,000 new jobs.
Employment growth was particularly notable among individuals aged 25 to 54, with a significant increase for women in that age group. The unemployment rate remained stable at 5.8% for men aged 25 to 54 but dropped to 5.2% for women in the same category.
Among the provinces, Ontario led in job creation, adding 52,000 new jobs in July, primarily in the professional, scientific, and technical services sector. British Columbia also experienced a notable employment increase, with 18,000 new jobs added.
Manitoba and Nova Scotia saw their employment rates rise by 0.8%, adding 5,900 and 4,600 jobs, respectively. Overall, Canada has added 181,000 jobs since April and 196,000 from a year ago, signaling positive momentum in the job market following good news in May and June.
CIBC senior economist Andrew Grantham praised the job numbers, stating that the increase exceeded expectations, attributing it to robust hiring in July. He also highlighted the strength of the student summer job market, with youth unemployment at its lowest since early 2024. However, disparities were noted among racialized youth, with higher unemployment rates for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
While Canada’s overall unemployment rate has reached a two-year low at 6.4%, economists caution that it remains slightly higher than full employment levels. BMO chief economist Douglas Porter emphasized that despite positive employment trends, wage growth has slowed to 2.8% year over year, the slowest rate in four years, which could impact economic recovery.
Looking ahead, concerns loom over potential trade disruptions, with U.S. President Donald Trump threatening 50% tariffs on Canadian imports effective August 19. Canada is advocating for tariff reductions and seeking relief from sectoral tariffs, while trade negotiations under the Canada-United States-Mexico Agreement are set to resume in the coming months.
