Canada’s job market saw significant growth in July, with the addition of 75,000 jobs, representing a 0.4% increase, leading to a decrease in the unemployment rate to 6.4%, the lowest in two years. Statistics Canada’s latest labor force survey revealed that the majority of these job gains were distributed between full-time and part-time positions, notably with the wholesale and retail trade sector contributing 21,000 new jobs.
Employment levels saw an uptick among individuals aged 25 to 54, particularly for women within this age bracket. The unemployment rate for men aged 25 to 54 remained steady at 5.8%, while it declined to 5.2% for women in the same group. Ontario recorded the highest job gains among all provinces in July, adding 52,000 jobs, primarily in the professional, scientific, and technical services sector. Similarly, British Columbia experienced a substantial increase with 18,000 new jobs.
Manitoba’s employment rate surged by 0.8%, adding 5,900 jobs, while Nova Scotia saw a similar rise of 0.8%, attributed to the addition of 4,600 jobs. Since April, Canada has seen a total increase of 181,000 jobs, and in comparison to the previous year, there has been a boost of 196,000 jobs. The positive job market momentum in July follows the encouraging employment trends seen in May and June.
CIBC senior economist Andrew Grantham noted that the job report surpassed expectations, attributing the growth to robust hiring activities in July. The summer job market for students was notably stronger this year, with youth unemployment levels, particularly for individuals aged 15 to 24, reaching the lowest point since early 2024. However, disparities were observed among racialized youth, with varying unemployment rates, such as 22.6% for Black youth, 15.4% for Chinese youth, and 13.9% for South Asian youth, compared to 11.6% for non-racialized and non-Indigenous youth.
Although the overall unemployment rate of 6.4% is at its lowest in two years, Grantham highlighted that it still remains half a point higher than what is considered full employment. While the positive employment trends are encouraging, there was a slight slowdown in average hourly wage growth, standing at 2.8% year-over-year, down from 3.3% in June and marking the slowest growth in four years.
Economists pointed out that the labor market is showing signs of stabilization after facing challenges earlier in the year, with businesses adapting amidst trade-related uncertainties. While the latest job numbers indicate a positive trajectory, concerns loom over potential trade disruptions, including U.S. President Donald Trump’s recent threats of imposing 50% tariffs on a range of Canadian imports. Discussions on trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the upcoming months.