Canada adds 75,000 new jobs in July, unemployment rate lowest in 2 years

Canada added 75,000 jobs in July, up 0.4 per cent, as the unemployment rate fell to 6.4 per cent, its lowest level in two years.

Statistics Canada’s labour force survey released on Friday said most of those gains were split between full- and part-time work, as wholesale and retail trade alone added 21,000 new jobs.

The agency says employment rose for people aged 25 to 54, and mostly for women in that age group.

The unemployment rate held steady at 5.8 per cent for men aged 25 to 54, Statistics Canada says, while falling 5.2 per cent for women in that cohort.

Ontario added the most jobs of any province in July, with 52,000, or an increase of 0.6 per cent, mostly in the professional, scientific and technical services sector. British Columbia had a similar increase, with 18,000 new jobs.

Manitoba’s employment rate rose 0.8 per cent, adding 5,900 new jobs, while Nova Scotia’s increased 0.8 per cent, thanks to 4,600 jobs.

Statistics Canada said the country is up 181,000 jobs since April, and 196,000 from a year ago.

July’s employment rate boost follows on good jobs news in May and June.

“Three straight months moving in the right direction is exactly how turning points begin,” Laura Ulrich, director of economic research at the recruitment firm Indeed, said in an statement.

“And if the breadth we saw in July holds into the fall, stabilization could quietly become the momentum Canada has been waiting for.”

Jobs report exceeds expectations

The hike in job numbers was “well above” forecasts, says CIBC senior economist Andrew Grantham, adding it’s thanks to “brisk hiring” in July.

There was also good news for more young people, he said, with the student summer job market stronger than it’s been in the past two years and unemployment for young people, ages 15 to 24, the lowest since early 2024.

But the situation varied when it came to racialized youth, with the July unemployment rate for Black youth at 22.6 per cent, 15.4 per cent for Chinese youth and 13.9 per sent for South Asian youth.

By comparison, the unemployment rate for non-racialized and non-Indigenous youth was 11.6 per cent last month.

The 6.4 per cent overall unemployment rate may be at its lowest level in two years, Grantham said in a statement, but it’s still about half a point higher than what it would be if Canada’s workforce was at what is considered full employment.

He said that means unemployment is not at a level that “will fuel domestically driven inflation.”

BMO chief economist Douglas Porter said Canada’s labour force has only grown by less than 8,000 jobs a month or 91,200 people over the past year.

“So it doesn’t take much in the way of job gains to carve down that jobless rate,” he said in an email statement.

He also said that positive trends in employment and job finding are offset by average hourly wage increases having “simmered down” to 2.8 per cent year over year, compared to 3.3 per cent in June, making it “the slowest in four years and in line with pre-pandemic trends.”

Looming tariffs could affect gains

Economists have previously said the labour market appeared to be stabilizing after the first quarter of the year brought a mild contraction and employers shed jobs.

The economy likely fared a lot better in the second quarter, with Statistics Canada estimating real GDP grew 3.4 per cent on an annualized basis over the three-month period.

“The latest jobs numbers add to the evidence that businesses are finding ways to navigate the current trade-related uncertainty,” said Desjardins managing director Royce Mendes.

But there could be further trade turmoil on the horizon.

U.S. President Donald Trump’s latest threats of 50 per cent tariffs on a wide range of Canadian imports, due to go into effect on Aug. 19.

Canada is pushing for the U.S. to drop those tariffs, possibly ending provincial bans on U.S. alcohol sales as a show of goodwill, as well as seeking relief from the sectoral tariffs on industries such as steel and aluminum.

Talks on the Canada-United States-Mexico Agreement are also due to resume in the fall.