Canada’s job market saw a notable uptick in July, with the addition of 75,000 jobs, marking a 0.4% increase and driving the unemployment rate down to 6.4%, its lowest level in two years. Statistics Canada’s latest labor force survey reveals that the bulk of these job gains were evenly distributed between full-time and part-time positions, notably with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment growth was particularly strong among individuals aged 25 to 54, with women in this demographic experiencing the most significant increase. While the unemployment rate for men in the 25 to 54 age group remained steady at 5.8%, it dropped to 5.2% for women in the same category.
Ontario led the provinces in job creation, adding 52,000 jobs in July, primarily within the professional, scientific, and technical services sector. British Columbia followed suit with an increase of 18,000 new jobs. Manitoba and Nova Scotia also saw positive employment trends, with respective increases of 0.8% and 4,600 jobs, and 0.8% and 5,900 jobs.
Since April, Canada has seen a total job increase of 181,000, with a year-over-year rise of 196,000. The recent surge in employment numbers in July comes on the heels of positive job reports from May and June, indicating a promising trend for the labor market.
Economists have lauded the job market performance, with CIBC senior economist Andrew Grantham noting that the job additions surpassed expectations. Notably, the summer job market for students exhibited strength, with the unemployment rate for individuals aged 15 to 24 hitting its lowest point since early 2024.
However, disparities were observed among racialized youth, with Black youth facing an unemployment rate of 22.6%, compared to 15.4% for Chinese youth and 13.9% for South Asian youth. In contrast, non-racialized and non-Indigenous youth had an unemployment rate of 11.6% in July.
Despite the positive job market indicators, Grantham pointed out that Canada’s overall unemployment rate of 6.4% remains slightly higher than the level associated with full employment. BMO chief economist Douglas Porter highlighted that while employment trends are favorable, the growth in average hourly wages has slowed to 2.8% year over year, the lowest rate in four years.
Looking ahead, economists are cautiously optimistic about the labor market’s stability, especially as Canada navigates trade-related uncertainties. While recent job figures suggest businesses are adapting well to the current economic environment, potential challenges loom, including impending U.S. tariffs on Canadian imports. Canada is actively seeking to resolve trade issues and is engaged in negotiations to address tariffs on various industries, such as steel and aluminum, and seeking to alleviate trade tensions through discussions on the Canada-United States-Mexico Agreement.