Canada saw a surge of 75,000 new jobs in July, marking a 0.4% increase and driving the unemployment rate down to 6.4%, the lowest in two years. Statistics Canada’s recent 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 alone contributing 21,000 new jobs.
The report indicated that employment opportunities expanded for individuals aged 25 to 54, particularly for women 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 led the provinces in job creation, adding 52,000 jobs in July, largely driven by growth in the professional, scientific, and technical services sector. British Columbia also experienced a notable increase, adding 18,000 new jobs.
Manitoba’s employment rate rose by 0.8%, generating 5,900 new jobs, while Nova Scotia saw a similar increase of 0.8%, creating 4,600 jobs. Overall, Canada has added 181,000 jobs since April and 196,000 compared to the previous year. This positive trend in employment follows encouraging job reports from May and June.
Andrew Grantham, a senior economist at CIBC, remarked that the job market exceeded expectations, attributing the robust hiring in July for the significant increase in job numbers. He also noted a positive trend in the student summer job market, which has been stronger than in the past two years, with the lowest unemployment rate for young people aged 15 to 24 since early 2024.
Despite the overall unemployment rate reaching a two-year low of 6.4%, experts like Grantham highlighted that it remains slightly higher than what is considered full employment. Economists emphasized that although job gains have helped lower the jobless rate, the average hourly wage increase has slowed down to 2.8% year over year, the slowest in four years, posing a challenge for sustained economic growth.
The economy is showing signs of stabilization after a mild contraction in the first quarter, with employers shedding jobs. However, looming tariffs, such as the proposed 50% tariffs on Canadian imports by U.S. President Donald Trump, could potentially impact Canada’s recent job gains. Discussions on trade-related issues, including sectoral tariffs on steel and aluminum, are ongoing, with negotiations under the Canada-United States-Mexico Agreement set to resume in the fall.
