Canada saw a rise of 75,000 jobs in July, marking a 0.4% increase and pushing the unemployment rate down to 6.4%, its lowest point in two years. According to Statistics Canada’s labor force survey released on Friday, the majority of these job gains were evenly distributed between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment levels increased notably for individuals aged 25 to 54, particularly for women within that age bracket. Statistics Canada reported that the unemployment rate remained steady at 5.8% for men aged 25 to 54 but decreased to 5.2% for women in the same group.
Ontario led the provinces in job creation for July, adding 52,000 jobs, a 0.6% increase, mainly in the professional, scientific, and technical services industry. British Columbia also experienced a similar upturn, adding 18,000 new jobs.
Manitoba’s employment rate surged by 0.8%, resulting in 5,900 new jobs, while Nova Scotia saw a similar 0.8% increase, adding 4,600 jobs. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to the previous year.
Andrew Grantham, a senior economist at CIBC, noted that the job report exceeded expectations with robust hiring in July. The summer job market for students was reported as stronger than in the past two years, with the unemployment rate for young individuals aged 15 to 24 at its lowest since early 2024.
However, disparities were observed among racialized youth, with unemployment rates of 22.6% for Black youth, 15.4% for Chinese youth, and 13.9% for South Asian youth in July. In contrast, the unemployment rate for non-racialized and non-Indigenous youth stood at 11.6% last month.
While the overall unemployment rate of 6.4% is at a two-year low, economists caution that it remains half a percentage point higher than what is considered full employment. The labor force has seen a modest increase of less than 8,000 jobs per month or 91,200 individuals over the past year, according to BMO chief economist Douglas Porter.
Looking ahead, economists anticipate that looming tariffs could impact the recent job gains, as trade-related uncertainty persists. Despite positive trends in employment, concerns are raised regarding the slowdown in average hourly wage growth to 2.8% year over year, the slowest in four years and in line with pre-pandemic levels.