Canada saw a rise of 75,000 jobs in July, marking a 0.4% increase and dropping the unemployment rate to 6.4%, the lowest in two years. Statistics Canada’s recent labor force survey revealed that the majority of these job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment levels surged for individuals aged 25 to 54, particularly for women within this demographic. The unemployment rate remained stable at 5.8% for men aged 25 to 54, while it decreased to 5.2% for women in the same age group. Ontario led the provinces in job creation for July, adding 52,000 jobs, mainly in the professional, scientific, and technical services field. British Columbia experienced a similar uptick, with 18,000 new job opportunities.
Manitoba and Nova Scotia both saw employment rate increases of 0.8%, resulting in 5,900 and 4,600 new jobs, respectively. Overall, Canada has added 181,000 jobs since April and 196,000 compared to the previous year. This positive trend in employment follows favorable job reports in May and June.
According to Laura Ulrich, director of economic research at Indeed, the consecutive months of job growth signal a potential turning point, with the possibility of Canada gaining momentum if the broad job market improvements witnessed in July continue into the fall.
The substantial increase in job numbers surpassed expectations, driven by robust hiring activities in July, as emphasized by CIBC senior economist Andrew Grantham. Additionally, the youth job market, particularly for individuals aged 15 to 24, showed strength, with the student summer employment sector performing exceptionally well.
While the overall unemployment rate of 6.4% is at a two-year low, economists like Grantham and BMO chief economist Douglas Porter highlighted that there is still room for improvement to reach full employment levels. Despite the positive employment trends, average hourly wage growth has slowed down to 2.8% year-over-year, signaling a need for sustained job creation to further reduce the unemployment rate.
Looking ahead, concerns loom over potential trade disruptions, including looming tariffs from the U.S. President Donald Trump’s threats of imposing 50% tariffs on various Canadian imports. Canada is actively seeking to resolve trade disputes to mitigate any adverse impacts on the labor market. Talks related to trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the coming months.