Canada July Employment Rises 75.1K, Unemployment Rate Falls to 6.4%
Key Takeaways
- •Canada added 75,100 jobs in July 2026, far exceeding the 15,000 gain economists had projected.
- •The unemployment rate declined to 6.4%, reaching its lowest level in two years.
- •July marked the third straight month of labour market improvement, bringing cumulative employment growth since April to 181,000 positions.
- •Average hourly wage growth slowed to 2.8% year-over-year in July, down from 3.3% the previous month.
- •The Bank of Canada has characterized the combination of strong hiring and cooling wage inflation as consistent with a labour market approaching better balance.
Canada's labour market strengthened further in July 2026, with employment rising by 75,100 jobs, significantly exceeding the +15,000 expected by economists. The unemployment rate edged down to 6.4%, its lowest level in two years, coming in below the 6.5% forecast.
Key Labour Force Survey Data for July
- Employment change: +75.1K (vs +15K expected; prior month +18.2K)
- Unemployment rate: 6.4% (vs 6.5% expected; prior 6.5%)
- Full-time employment: +38.6K (vs +0.6K prior)
- Part-time employment: +36.6K (vs +17.5K prior)
- Participation rate: 65.1% (vs 65.0% prior)
- Average hourly wages y/y: 2.8% (vs 3.3% prior)
Broad-Based Job Gains
The gains were evenly split between full-time and part-time positions and marked the third consecutive month of improving labour market conditions, extending total employment growth since April to 181,000 jobs. Private-sector hiring and self-employment continued to drive the expansion, while public-sector employment declined.
Job creation was broad-based across industries, led by:
- Wholesale and retail trade
- Finance, insurance, real estate, rental and leasing
- Professional, scientific and technical services
- Construction
These gains were partially offset by declines in public administration and agriculture.
Regional Breakdown
Regionally, Ontario accounted for the largest share of new jobs, while British Columbia, Manitoba, and Nova Scotia also posted employment gains.
Demographic Trends
The report also pointed to improving labour market conditions across several demographic groups. Employment increased among core-aged workers (25–54 years old), particularly women, whose unemployment rate fell to 5.2%. Youth unemployment held steady at 12.6%, remaining well below its April peak, while the overall job-finding rate improved compared with a year earlier, suggesting unemployed workers are finding jobs more easily.
Wage Growth Cools
Despite the stronger hiring, wage pressures continued to moderate. Average hourly earnings rose 2.8% from a year earlier, slowing from 3.3% growth in June, indicating that while Canada's labour market remains resilient, wage inflation is easing. The combination of accelerating employment growth and decelerating wage inflation is a data mix the Bank of Canada has cited as consistent with a labour market moving toward better balance, and the August Labour Force Survey will be among the final major data releases before the Bank's next rate decision.
Source: ForexLive / InvestingLive
