Canada’s job market saw a significant boost in July, adding 75,000 new jobs, marking a 0.4% increase and driving the unemployment rate down to 6.4%, the lowest level in two years. Statistics Canada’s latest labor force survey indicated that the majority of job gains were evenly distributed between full-time and part-time positions, with the wholesale and retail trade sector contributing 21,000 new jobs.

Employment growth was particularly notable among individuals aged 25 to 54, with women in this age group experiencing a substantial increase. The unemployment rate for men aged 25 to 54 remained steady at 5.8%, while it dropped to 5.2% for women in the same demographic. Ontario led the provinces in job creation, adding 52,000 jobs in July, primarily in the professional, scientific, and technical services industry. British Columbia also saw a notable increase, adding 18,000 new jobs.

Manitoba and Nova Scotia experienced employment rate hikes of 0.8%, resulting in the creation of 5,900 and 4,600 new jobs, respectively. Overall, Canada has gained 181,000 jobs since April and 196,000 compared to a year ago. The positive trend in July follows strong job reports from May and June.

Andrew Grantham, a senior economist at CIBC, highlighted that the job numbers exceeded expectations, attributing the increase to robust hiring activities in July. The summer job market for students showed strength, with the unemployment rate for individuals aged 15 to 24 reaching its lowest level since early 2024. However, disparities were noted among racialized youth, with unemployment rates varying among different demographic groups.

While the overall unemployment rate stands at 6.4%, Grantham noted that it remains higher than the level associated with full employment. Despite positive trends in job creation, the average hourly wage growth has slowed to 2.8% year over year, indicating a four-year low and aligning with pre-pandemic patterns.

Looking ahead, economists suggest that looming tariffs could impact the job market’s gains, particularly with U.S. President Donald Trump’s threats of imposing substantial tariffs on Canadian imports. The ongoing trade-related uncertainties highlight the need for businesses to navigate potential challenges effectively. Talks regarding trade agreements, such as the Canada-United States-Mexico Agreement, are set to resume in the coming months, emphasizing the importance of finding solutions to trade disputes to sustain economic growth.