Canada’s job market experienced a significant boost in July with the addition of 75,000 jobs, marking a 0.4 per cent increase and leading to a decline in the unemployment rate to 6.4 per cent, the lowest level in two years. According to Statistics Canada’s latest labor force survey, the majority of these job gains were distributed between full-time and part-time positions, with the wholesale and retail trade sector alone contributing 21,000 new jobs.
Employment saw an uptick among individuals aged 25 to 54, particularly among women in that age bracket. Notably, the unemployment rate remained steady at 5.8 per cent for men aged 25 to 54, while dropping to 5.2 per cent for women in the same group. Ontario led the provinces in job creation for July, adding 52,000 jobs, mostly in the professional, scientific, and technical services sector. British Columbia also saw a notable increase with 18,000 new jobs.
Manitoba witnessed a 0.8 per cent rise in employment, adding 5,900 new jobs, while Nova Scotia experienced a similar increase of 0.8 per cent, thanks to the addition of 4,600 jobs. Overall, Canada has seen a rise of 181,000 jobs since April and 196,000 compared to the previous year, following positive employment reports in May and June.
The surge in job numbers surpassed expectations, with CIBC senior economist Andrew Grantham attributing it to robust hiring in July. The youth employment market also showed improvement, with the student summer job market stronger than in the past two years, and unemployment for individuals aged 15 to 24 at its lowest since early 2024.
However, there were disparities among racialized youth, with Black youth facing an unemployment rate of 22.6 per cent in July, compared to 15.4 per cent for Chinese youth and 13.9 per cent for South Asian youth. In contrast, non-racialized and non-Indigenous youth had an unemployment rate of 11.6 per cent last month.
While the overall unemployment rate of 6.4 per cent is the lowest in two years, economists point out that it remains half a point higher than what is considered full employment. BMO chief economist Douglas Porter noted that although positive trends in employment are evident, average hourly wage increases have slowed down to 2.8 per cent year over year, the slowest in four years.
Looking ahead, looming tariffs could impact these job gains, with the potential for further trade disruptions on the horizon. Discussions on the Canada-United States-Mexico Agreement are set to resume in the fall as Canada seeks relief from sectoral tariffs and potential provincial bans on U.S. alcohol sales.
