Canada saw a surge in job numbers in July, adding 75,000 jobs, marking a 0.4% increase and pushing the unemployment rate down to 6.4%, the lowest in two years. Statistics Canada’s recent labor force survey revealed that the job gains were evenly split between full-time and part-time positions, with the wholesale and retail trade sector alone contributing 21,000 new jobs.
Employment growth was particularly notable among individuals aged 25 to 54, with women in this demographic experiencing the most significant rise. While the unemployment rate remained stable at 5.8% for men aged 25 to 54, it dropped to 5.2% for women in the same age group. Ontario led the way in job creation among provinces, adding 52,000 jobs, primarily in the professional, scientific, and technical services sector. British Columbia also saw a notable increase with 18,000 new jobs.
Manitoba’s employment rate climbed by 0.8%, resulting in 5,900 new jobs, while Nova Scotia experienced a similar increase of 0.8%, adding 4,600 jobs. Since April, Canada has added a total of 181,000 jobs, and compared to a year ago, the country has seen a gain of 196,000 jobs. The positive job trend in July follows on from promising data in May and June.
Economists were pleasantly surprised by the job report, noting that the job numbers exceeded expectations. CIBC senior economist Andrew Grantham highlighted the robust hiring in July, particularly emphasizing the strength of the student summer job market, which is currently at its strongest in the past two years. However, there were disparities in unemployment rates among racialized youth, with Black youth facing the highest unemployment rate at 22.6%.
While the overall unemployment rate of 6.4% is at its lowest level in two years, it still remains half a point higher than what is considered full employment. BMO chief economist Douglas Porter noted that despite positive employment trends, the average hourly wage increase has slowed down to 2.8% year over year, the slowest in four years.
Looking ahead, economists are cautiously optimistic about the job market but warn of potential challenges, such as looming tariffs that could impact the recent job gains. Businesses are adapting to trade-related uncertainties, but potential trade disputes, including U.S. President Donald Trump’s threats of imposing 50% tariffs on Canadian imports, could pose risks to the economy. Canada is actively negotiating to ease trade tensions and seeking relief from sectoral tariffs on key industries like steel and aluminum. Talks on the Canada-United States-Mexico Agreement are set to resume in the fall.
