(OTTAWA, CANADA) – Canada’s economy added 75,000 jobs in July, pushing the unemployment rate down to 6.4 percent, its lowest level in two years, according to the latest labour force survey from Statistics Canada. The gain represented a 0.4 percent increase in employment and followed solid jobs reports in May and June.
The new positions were split between full time and part time work. Wholesale and retail trade alone added 21,000 jobs. Employment rose for people aged 25 to 54, with the increase concentrated among women in that group. The jobless rate for men aged 25 to 54 held steady at 5.8 percent, while the rate for women in the same age bracket fell to 5.2 percent.
Ontario recorded the largest provincial gain, adding 52,000 jobs, an increase of 0.6 percent, mostly in the professional, scientific and technical services sector. British Columbia added 18,000 jobs. Manitoba added 5,900 positions, up 0.8 percent, while Nova Scotia gained 4,600 jobs, also a 0.8 percent rise.
Canada has now added 181,000 jobs since April and 196,000 compared with a year ago. Laura Ulrich, director of economic research at recruitment firm Indeed, said three straight months moving in the right direction marks how turning points begin. She added that if the breadth seen in July holds into the autumn, stabilisation could become momentum.
The job numbers came in well above forecasts. CIBC senior economist Andrew Grantham said brisk hiring drove the result. The student summer job market was stronger than it has been in the past two years, with unemployment for people aged 15 to 24 at its lowest since early 2024. However, the situation varied for racialised youth. The July unemployment rate for Black youth stood at 22.6 percent, compared with 15.4 percent for Chinese youth and 13.9 percent for South Asian youth. The rate for youth not racialised and not Indigenous was 11.6 percent.
Mr Grantham noted that while the overall 6.4 percent unemployment rate is at a two year low, it remains about half a percentage point above what would be considered full employment. That means unemployment is not at a level that will fuel domestically driven inflation, he said.
BMO chief economist Douglas Porter pointed out that Canada’s labour force has grown by less than 8,000 jobs a month, or 91,200 people, over the past year. He said it does not take much in the way of job gains to bring the jobless rate down. Mr Porter also noted that average hourly wage increases have simmered down to 2.8 percent year on year, compared with 3.3 percent in June, making it the slowest pace in four years and in line with trends seen before the pandemic.
The economy appears to have fared better in the second quarter after a mild contraction in the first three months of the year, when employers shed jobs. Statistics Canada estimates real GDP grew at an annualised rate of 3.4 percent over the second quarter period. Desjardins managing director Royce Mendes said the latest jobs figures add to evidence that businesses are finding ways to navigate the current trade related uncertainty.
Further trade disruption could lie ahead. US President Donald Trump has threatened 50 percent tariffs on a wide range of Canadian imports, due to take effect on 19 August. Canada is pushing for those tariffs to be dropped, possibly by ending provincial bans on US alcohol sales as a gesture of goodwill, and is also seeking relief from sectoral tariffs on industries such as steel and aluminium. Talks on the Canada United States Mexico Agreement are set to resume in the autumn.
At the current exchange rate, the Canadian dollar stands at roughly $0.73 US, £0.58 and €0.67. Canada’s annual GDP is approximately $2.2 trillion US, or £1.76 trillion and €2.02 trillion.