In July, Canada saw a job increase of 75,000, marking a 0.4% rise, and the unemployment rate dropped to 6.4%, the lowest in two years, as per Statistics Canada’s latest labor force survey. The majority of these job gains were evenly distributed between full-time and part-time positions, with the wholesale and retail trade sector alone adding 21,000 new jobs.
Employment saw growth among individuals aged 25 to 54, particularly for women in that age bracket. The unemployment rate remained steady at 5.8% for men aged 25 to 54 but decreased to 5.2% for women in the same group. Ontario led in job creation among provinces, adding 52,000 jobs (a 0.6% increase), primarily in the professional, scientific, and technical services sector. British Columbia also experienced a similar upturn, with 18,000 new jobs.
Manitoba and Nova Scotia both saw employment rate increases of 0.8%, adding 5,900 and 4,600 new jobs, respectively. Since April, Canada has added 181,000 jobs, and compared to a year ago, the country has gained 196,000 jobs. This positive trend in July follows previous good employment news in May and June.
According to Laura Ulrich, director of economic research at Indeed, the consecutive three-month positive trajectory signifies a potential turning point in the economy. CIBC senior economist Andrew Grantham highlighted that the job numbers exceeded expectations due to robust hiring in July.
The youth employment scenario also showed improvement, with the summer job market for students stronger than in the past two years and the unemployment rate for individuals aged 15 to 24 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 the overall unemployment rate of 6.4% is at its lowest in two years, economists suggest it is still slightly higher than full employment levels. BMO chief economist Douglas Porter noted the modest growth in Canada’s labor force over the past year and highlighted the slowdown in average hourly wage increases.
Despite these positive employment trends, looming tariffs could impact the gains. Economists believe that the labor market is stabilizing after a mild contraction earlier in the year. Businesses are adapting to trade-related uncertainties, but potential trade disruptions, such as U.S. President Donald Trump’s tariff threats on Canadian imports, could pose challenges in the near future.
Canada is actively seeking to resolve these trade issues, including negotiating the removal of tariffs and exploring trade negotiations with the U.S. and Mexico. The upcoming talks on the Canada-United States-Mexico Agreement in the fall will be crucial in determining the future trade landscape.