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. The latest data from Statistics Canada’s labor force survey revealed that the majority of these job gains were evenly distributed between full-time and part-time positions, with the wholesale and retail trade sector leading the way by adding 21,000 new jobs.
Employment growth was particularly notable among individuals aged 25 to 54, with a significant increase in female employment in this age group. While the unemployment rate remained steady at 5.8% for men aged 25 to 54, it dropped to 5.2% for women in the same category.
Ontario emerged as the top job creator among Canadian provinces in July, adding 52,000 new jobs, primarily in the professional, scientific, and technical services sector. British Columbia also experienced a notable upsurge, adding 18,000 new jobs.
Noteworthy employment gains were recorded in Manitoba, where the employment rate rose by 0.8%, resulting in 5,900 new jobs, and in Nova Scotia, which saw a similar 0.8% increase, adding 4,600 jobs. Statistics Canada reported that the country has seen a total increase of 181,000 jobs since April and 196,000 jobs compared to the previous year.
The positive momentum in July’s employment figures follows similarly encouraging trends in May and June. Laura Ulrich, the director of economic research at recruitment firm Indeed, expressed optimism about the sustained growth, indicating that Canada may be on the cusp of a significant economic upturn if the broad-based job creation continues into the fall.
Economists lauded the July job report, which exceeded expectations, attributing the robust job numbers to vigorous hiring activities during the month. CIBC senior economist Andrew Grantham highlighted the strength in the student summer job market and noted that the unemployment rate for individuals aged 15 to 24 was the lowest since early 2024.
However, disparities were evident among racialized youth, with higher unemployment rates reported for Black, Chinese, and South Asian youth compared to their non-racialized counterparts. Despite the overall unemployment rate reaching a two-year low of 6.4%, economists cautioned that the figure is still below what is considered full employment in Canada.
BMO chief economist Douglas Porter emphasized that while the job market has shown positive trends, wage growth has slowed down to 2.8% year over year, the lowest rate in four years. He highlighted the need for sustained job creation to drive down the unemployment rate further.
Looking ahead, economists anticipate potential challenges from looming tariffs, with U.S. President Donald Trump’s threats of imposing 50% tariffs on Canadian imports raising concerns. Efforts are underway to mitigate trade uncertainties, with negotiations ongoing to address tariffs on key industries like steel and aluminum, along with provincial bans on U.S. alcohol sales. Talks on the Canada-United States-Mexico Agreement are set to resume in the fall, as stakeholders seek to navigate evolving trade dynamics.