Canada witnessed a surge of 75,000 new jobs in July, marking a 0.4% increase and driving the unemployment rate down to 6.4%, its lowest level in two years. Statistics Canada’s recent labor force survey revealed that the majority of job gains were distributed between full-time and part-time positions, notably with the wholesale and retail trade sector contributing 21,000 new jobs.
The employment growth was particularly notable among individuals aged 25 to 54, especially women in that age bracket. While the unemployment rate for men aged 25 to 54 remained stable at 5.8%, it decreased to 5.2% for women in the same group. Among the provinces, Ontario led with the addition of 52,000 jobs in July, primarily in the professional, scientific, and technical services sector. British Columbia followed suit with an increase of 18,000 new jobs.
Manitoba saw a notable 0.8% rise in employment, adding 5,900 jobs, while Nova Scotia experienced a similar 0.8% increase, creating 4,600 new jobs. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to the previous year.
The positive momentum in July builds on the encouraging job trends observed in May and June, signaling a potential turning point in the labor market. Economists, including Laura Ulrich from the recruitment firm Indeed, expressed optimism about the broad-based employment growth and the potential for this momentum to continue in the coming months.
CIBC senior economist Andrew Grantham highlighted that the job numbers exceeded expectations, attributing the robust hiring activity in July as a key factor. He also noted the strengthened student summer job market and the lowest unemployment rate for young people (ages 15 to 24) since early 2024. However, disparities persisted among racialized youth, with higher unemployment rates reported for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
Despite the overall unemployment rate reaching a two-year low of 6.4%, economists like Grantham and BMO chief economist Douglas Porter cautioned that there is still room for improvement to reach full employment levels. Porter emphasized that while job gains have contributed to lowering the unemployment rate, wage growth has slowed down, indicating a need for sustained job creation efforts.
Looking ahead, economists foresee potential challenges on the horizon, including looming tariffs that could impact the recent job market gains. Despite efforts to navigate trade-related uncertainties, such as potential tariffs on Canadian imports, ongoing trade negotiations and market dynamics will continue to influence Canada’s economic landscape in the coming months.