Canada saw a rise of 75,000 new positions in July, marking a 0.4% increase, along with a decrease in the unemployment rate to 6.4%, the lowest in two years. Statistics Canada’s recent labor force survey indicated that the majority of the job gains were evenly distributed between full-time and part-time roles, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment levels went up notably for individuals aged 25 to 54, especially among women in this age bracket. While the unemployment rate for men aged 25 to 54 remained steady at 5.8%, it dropped to 5.2% for women in the same group. Ontario led the way among provinces, adding 52,000 jobs in July, primarily in the professional, scientific, and technical services industry, while British Columbia also experienced a significant increase with 18,000 new jobs.
Manitoba and Nova Scotia both saw employment rate hikes of 0.8%, adding 5,900 and 4,600 jobs respectively. Overall, Canada has added 181,000 jobs since April and 196,000 jobs compared to the previous year. The positive trend in July follows a series of good job reports in May and June.
Andrew Grantham, a senior economist at CIBC, noted that the job market increase surpassed expectations due to robust hiring in July. He highlighted the strength of the student summer job market, indicating it was stronger than in the past two years, with the unemployment rate for individuals aged 15 to 24 at its lowest since early 2024. However, disparities were observed among racialized youth, with higher unemployment rates for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
Although the overall unemployment rate of 6.4% is the lowest in two years, Grantham cautioned that it remains half a percentage point higher than what is considered full employment. BMO chief economist Douglas Porter emphasized that despite positive employment trends, average hourly wage increases have slowed down to 2.8% year over year, the slowest in four years and in line with pre-pandemic figures.
Looking ahead, economists warn that looming tariffs could impact the job gains. While the labor market has been showing signs of stabilization, there are concerns about potential trade uncertainties. The economy is expected to have performed better in the second quarter, with real GDP estimated to have grown by 3.4% on an annualized basis. Desjardins managing director Royce Mendes mentioned that the latest job numbers indicate businesses are adapting to trade-related uncertainties, but the threat of new tariffs, including those proposed by U.S. President Donald Trump, could pose challenges in the near future. Canada is actively seeking relief from existing tariffs and hoping for a resolution in trade negotiations.