Canada’s labour market delivered a stronger-than-expected performance in July, adding 75,000 jobs as the national unemployment rate declined to its lowest level in two years, according to Statistics Canada.
The employment increase significantly exceeded economists’ expectations. A Reuters poll had forecast a gain of approximately 15,000 jobs, meaning the actual increase was five times higher than anticipated. The new positions were divided between full-time and part-time employment.
Since April, Canada has added 181,000 jobs, while employment is up 196,000 compared with a year earlier.
The national unemployment rate fell by 0.1 percentage points to 6.4 per cent in July. It is also half a percentage point lower than a year ago, as more Canadians looking for work have been able to find employment.
Employment growth was led by wholesale and retail trade, which added 21,000 jobs, although employment in the sector remains 50,000 below its level a year earlier.
The finance, insurance, real estate, rental and leasing sector gained 18,000 positions, while professional, scientific and technical services added another 17,000 jobs.
Some sectors recorded losses. Public administration shed 15,000 jobs, while employment in agriculture declined by 9,600.
Economists said the figures provide further evidence that Canada’s economy is recovering despite continued uncertainty surrounding U.S. tariffs and elevated energy prices. However, they cautioned that the labour market has not yet returned to full strength.
Wage growth also moderated in July. Average hourly wages increased 2.8 per cent year-over-year, down from 3.3 per cent in June.
Economists suggested the improving employment picture is unlikely to prompt an immediate shift from the Bank of Canada, with significant economic slack remaining and an interest-rate increase viewed as unlikely before 2027.
