Canada added 75K jobs in July ‘summer surge,’ but uncertainty remains

Canada added 75,000 net new jobs in July, according to Statistics Canada, as the national unemployment rate ticked down to 6.4 per cent — the lowest since July 2024.

The labour force survey for the month was released by the agency Friday morning, and the unemployment rate was down 0.1 per cent from June, when 18,000 jobs were added.

The July report marks the third straight month where the unemployment rate fell, and the 6.4 per cent reading was also half a per cent lower than the same month a year earlier.

“What matters isn’t the single month of data; it’s the consecutive strength. Since April, jobs in Canada have increased by 181,000 and the unemployment rate fell by half a percentage point, declining for three consecutive months,” said Laura Ulrich, director of economic research at Indeed, in a statement.

“One month of positive data can be noise, but three months in a row starts to look more like a trend.”

Statistics Canada says 51,000 core-aged people (25 to 54 years old) found work, and women in that category made up 33,000 of those jobs added.

The proportion of people who were unemployed in June and found work in July, measured as the job finding rate, increased to 20.8 per cent from 18.5 per cent a year earlier.

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The participation rate, which measures the share of Canadians age 15 or older that are either employed or considered actively looking for work, was 65.1 per cent, which Statistics Canada considered relatively unchanged from 65 per cent in June.

Meanwhile, the employed proportion of the same working age population last month was 60.9 per cent, up from 60.8 per cent in June.

CIBC economist Andrew Grantham said in a statement that the jobs report was mostly better than expected.

“Brisk hiring in July saw the unemployment rate tick lower again, despite a slight improvement in labour force participation. The 75,000 increase in employment was well above consensus forecasts.”

In a follow-up statement, Grantham said, “The Canadian labour market saw a summer surge in hiring, although with more people looking for work the unemployment rate only edged down slightly and remains higher than levels we believe are consistent with a balanced labour market.”

Youth unemployment (15 to 24 years old) was little changed at 12.6 per cent last month compared to 12.7 per cent in June, and down from a recent peak of 14.3 per cent in April. Compared to July 2025, the unemployment rate last month was 1.9 per cent lower for youth, but still higher than the pre-pandemic average of 10.8 per cent measured by the agency from 2017 to 2019.

Jobs were mostly split between full-time and part-time work, Statistics Canada says, with 58,000 jobs added in the private sector and self-employment increased by 44,000.

Meanwhile, the public sector shed 27,000 employees, says Statistics Canada. This comes as federal departments and agencies alone are looking to cut more than 12,000 full-time equivalent jobs over the next three years as part of Prime Minister Mark Carney’s government spending review.

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Wholesale and retail trade as a category saw the biggest increase in jobs last month compared to June at 21,000, but still down 50,000 jobs compared to a year earlier.

A large portion of July’s employment gains were also seen in finance, insurance, real estate, rental and leasing with 18,000, while professional, scientific and technical services increased by 17,000, and there were 16,000 new construction jobs added in the month.

Statistics Canada says employment in these three industries was still little changed on a year-over-year basis despite the monthly adds.

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.

However, U.S. President Donald Trump’s latest threats of 50 per cent tariffs on a wide range of Canadian imports are casting fresh uncertainty over employers.

“The labour market is not yet strong — the unemployment rate is still higher than normal, and wage growth slowed in July. But it has been improving despite still significant U.S. tariff uncertainty and higher energy prices,” Nathan Janzen, assistant chief economist at Royal Bank of Canada said in a statement.

“Tariff risks remain, but CUSMA continues to backstop duty-free trade for most Canadian exports to the U.S — and broader U.S. global tariff rates have been edging gradually lower rather than higher.”

Leading up to the report’s release, economists have said the labour market appears to be stabilizing after the first quarter of the year brought a mild contraction and employers shed jobs.

– with a file from The Canadian Press