Canada's July Jobs Surge Defies Tariff Headwinds, Unemployment at Two-Year Low

Canada's labor market delivered a powerful performance in July, with the economy adding a net 75,100 positions — more than four times the 16,500 jobs analysts had predicted. The unemployment rate fell for a third straight month to 6.4%, its lowest level since July 2024, according to fresh data from Statistics Canada.

The latest figures reinforce a narrative of resilience for an economy navigating U.S. tariffs and global uncertainty. The gains were broad-based, with full-time employment rising by 38,600 jobs and part-time work adding 36,600 positions. Private-sector hiring led the way, particularly in wholesale and retail trade, finance and insurance, and professional and scientific services.

Notably, public-sector employment contracted by 14,500 jobs, reflecting ongoing government efforts to trim spending. The report follows a similarly robust May, when the economy created 87,800 jobs.

The Bank of Canada, which had earlier flagged signs that the economy was coping better than expected with tariff pressures and Middle East conflict fallout, now sees second-quarter growth landing near 3.4% annually — well above its initial 2.5% projection.

Wage growth, a key inflation gauge for the central bank, cooled to 3.0% year-over-year for permanent employees in July, down from 3.7% in June and the slowest pace since February 2022. That moderation could give policymakers room to consider further rate adjustments as they balance growth against price stability.