In July, Canada saw a notable increase of 75,000 jobs, representing a 0.4 per cent rise, leading to a decrease in the unemployment rate to 6.4 per cent, the lowest it has been in two years. Statistics Canada’s labor force survey indicated that the job gains were mainly divided between full-time and part-time positions, with the wholesale and retail trade sector alone contributing 21,000 new jobs.
The employment growth was particularly strong for individuals aged 25 to 54, especially for women in that age group. While the unemployment rate for men aged 25 to 54 remained stable at 5.8 per cent, it dropped to 5.2 per cent for women in the same category. Ontario recorded the highest job increase among all provinces in July, adding 52,000 jobs, primarily in the professional, scientific, and technical services sector. British Columbia also experienced a substantial increase with 18,000 new jobs.
Manitoba saw a 0.8 per cent rise in employment, adding 5,900 jobs, while Nova Scotia’s employment rate increased by the same margin, thanks to the addition of 4,600 jobs. Since April, Canada has gained 181,000 jobs, and compared to a year ago, there are 196,000 more jobs in the country. The positive trend in employment in July follows the encouraging job reports from May and June.
The job numbers exceeded expectations, with CIBC senior economist Andrew Grantham noting that the brisk hiring contributed significantly to the job market success in July. The report also highlighted a strong summer job market for young people, with the unemployment rate for individuals aged 15 to 24 being the lowest since early 2024.
Despite the unemployment rate reaching its lowest level in two years at 6.4 per cent, economists noted that the job market is not yet at full employment levels. BMO chief economist Douglas Porter emphasized that although the employment situation is improving, the average hourly wage growth has slowed down to 2.8 per cent year over year, the slowest in four years.
The labor market in Canada is showing signs of stabilization, with businesses adapting to trade-related uncertainties. However, looming tariffs could potentially impact the recent job gains. President Donald Trump’s threats of imposing 50 per cent tariffs on Canadian imports may add to trade tensions, with negotiations on various trade agreements, including the Canada-United States-Mexico Agreement, set to resume in the coming months.
