Canada saw a rise of 75,000 jobs in July, marking a 0.4% increase, leading to a decline in the unemployment rate to 6.4%, the lowest in two years, according to the latest labour force survey by Statistics Canada. The increase in employment was mainly attributed to gains in both full-time and part-time work, with the wholesale and retail trade sector alone adding 21,000 new jobs.
The report highlighted a growth in employment among individuals aged 25 to 54, particularly among women in that age group. While the unemployment rate remained steady at 5.8% for men aged 25 to 54, it dropped to 5.2% for women in the same category. Ontario topped the provinces in job additions, with 52,000 new positions, mainly in the professional, scientific, and technical services industry. British Columbia also experienced a significant increase with 18,000 new jobs.
Manitoba and Nova Scotia saw employment rates rise by 0.8%, adding 5,900 and 4,600 new jobs, respectively. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to the previous year. The positive trend in July follows strong job reports from May and June, indicating a potential momentum shift in the job market.
Economists noted that the job numbers exceeded expectations, with brisk hiring driving the surge in employment. The summer job market for students was reported to be stronger than the past two years, with the unemployment rate for young individuals (ages 15 to 24) at its lowest since early 2024. However, disparities were observed among racialized youth, with higher unemployment rates for Black, Chinese, and South Asian youth compared to non-racialized and non-Indigenous youth.
While the overall unemployment rate reached a two-year low, economists cautioned that it still remains above what is considered full employment. Despite the positive job gains, the average hourly wage increase has slowed down to 2.8% year over year, signaling a trend similar to pre-pandemic levels.
Looking ahead, economists warned of potential challenges due to looming tariffs, as trade-related uncertainties could impact the job market. The economy is expected to have performed better in the second quarter, with real GDP estimated to have grown by 3.4% on an annualized basis. Discussions on trade agreements, including the Canada-United States-Mexico Agreement, are set to resume in the fall amid ongoing trade disputes.