Canada experienced a notable increase of 75,000 new jobs in July, representing a 0.4% rise, leading to a decline in the unemployment rate to 6.4%, the lowest in two years. According to Statistics Canada’s latest labor force survey, the majority of these job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sector alone contributing 21,000 new jobs.
The report revealed that employment saw an uptick among individuals aged 25 to 54, particularly among women in that age group. For men aged 25 to 54, the unemployment rate remained stable at 5.8%, while it decreased to 5.2% for women in the same bracket. Ontario emerged as the top job creator among provinces in July, adding 52,000 jobs, primarily in the professional, scientific, and technical services sector. British Columbia also experienced a significant job increase, adding 18,000 new positions.
Manitoba and Nova Scotia saw their employment rates rise by 0.8%, adding 5,900 and 4,600 jobs, respectively. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to a year ago. The positive momentum in employment seen in May and June continued in July.
The surge in job numbers surpassed expectations, with CIBC senior economist Andrew Grantham attributing it to robust hiring activities in July. The summer job market for students was reported to be stronger than in the past two years, with the unemployment rate for individuals aged 15 to 24 reaching its lowest level since early 2024. However, disparities were noted among racialized youth, with varying unemployment rates for different ethnic groups.
While the overall unemployment rate of 6.4% marks a two-year low, economists highlighted that it remains slightly higher than what is considered full employment. Despite positive trends in employment, concerns were raised about the slowdown in average hourly wage increases, dropping to 2.8% year over year in July.
Looking ahead, economists are cautiously optimistic about the labor market’s stability, despite looming uncertainties such as potential tariffs. The ongoing trade-related challenges, including threats of tariffs on Canadian imports by the U.S., are being closely monitored, with negotiations and discussions underway to mitigate potential impacts on the Canadian economy.
