Canada saw a rise of 75,000 jobs in July, marking a 0.4% increase and bringing the unemployment rate down to 6.4%, the lowest it has been in two years. The latest report by Statistics Canada revealed that the job gains were evenly distributed between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Most of the employment growth was observed among individuals aged 25 to 54, particularly women in that age group. While the unemployment rate remained at 5.8% for men aged 25 to 54, it dropped to 5.2% for women in the same category. Ontario led the way in job creation among provinces, adding 52,000 jobs in July, mainly in the professional, scientific, and technical services industry. British Columbia also experienced a notable increase with 18,000 new jobs.
Manitoba and Nova Scotia both saw a 0.8% increase in employment, adding 5,900 and 4,600 jobs, respectively. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to the previous year, showcasing a positive trend in employment growth over recent months.
Economists were pleasantly surprised by the job report, which exceeded expectations, with CIBC senior economist Andrew Grantham attributing the robust job numbers to vigorous hiring activities in July. The youth employment market also showed promise, 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.
While the overall unemployment rate of 6.4% is at a two-year low, economists highlighted that there is still room for improvement to reach full employment levels. Despite positive trends in job creation, average hourly wage increases have slowed down to 2.8% year over year, the slowest rate in four years, indicating a need for continued economic growth to boost wages.
Looking ahead, economists caution that looming tariffs could impact the job market’s gains, with ongoing trade-related uncertainty posing potential challenges. Despite the positive job numbers, businesses are bracing for potential trade disruptions, including threats of tariffs on Canadian imports by the U.S. government. Negotiations on trade agreements, including the Canada-United States-Mexico Agreement, are expected to resume in the coming months to address these concerns.