Canada adds 75,100 Jobs, unemployment rate hits two-year low
By Nojoud Al Mallees
(Bloomberg) — The Canadian economy added a surprise 75,100 jobs last month while the unemployment rate hit its lowest level in two years — the latest evidence the economy is on a recovery path.
The jobless rate edged down to 6.4% in July from 6.5% the previous month, Statistics Canada reported on Friday.
Economists surveyed by Bloomberg were expecting employment increased by 20,000 last month, with the jobless rate holding steady at 6.5%. The job gain exceeded even the highest analyst estimate in the survey.
The Canadian dollar jumped to a session high after the data release, rising by as much as 0.5%. Canada bonds sold off immediately after the release, before reversing course and rallying as markets also weighed the surprise employment loss in the U.S.
Employment increased by 181,100 between May and July, marking the biggest three-month employment gain since before U.S. President Donald Trump began imposing tariffs on Canadian goods.
The job growth over the three-month period was also driven by full-time work and concentrated among private sector employees and self-employed workers. Hours worked also rose 0.6%.
The stronger-than-expected labour data suggests momentum in the Canadian economy is extending into the third quarter. Recent economic data has pointed to a strong rebound in the second quarter, after a year of economic stagnation brought on by U.S. tariffs.
Preliminary data previously released from the agency showed the economy tracking an annualized 3.4% growth between April and June, and recent international trade figures point to further upside.
While the economy continues to show signs of stabilization, trade uncertainty still looms. U.S. President Donald Trump has threatened to impose a new round of 50% tariffs on a number of Canadian goods starting Aug. 19.
“This is further evidence that the economy is turning a corner, or at least it was before fresh tariff threats were lobbed recently,” National Bank Financial’s Taylor Schleich said by email.
Canadian officials met with U.S. Trade Representative Jamieson Greer on Thursday as the two sides try to find a deal before Trump’s deadline.
Wholesale and retail trade led the July employment gains, followed by finance, insurance, real estate, rental and leasing, as well as professional, scientific and technical services and construction. Meanwhile, public administration recorded the largest decline that month.
Public sector employment declined on an annual basis for the first time since 2016, outside of the pandemic. That decrease was driven by fewer people employed in educational services.
“For the Bank of Canada, today’s numbers confirm their view that the economy is improving and suggest stronger economic momentum,” Charles St-Arnaud, chief economist at Servus Credit Union, said by email.
“However, the downside risk to the outlook remains, due to US trade policy uncertainty.”
July also marked a more favourable summer job market for returning students, compared to last year. The unemployment rate for returning students between the ages of 15 to 24 was 15.1%, down 2.4 percentage points from July 2025 but still higher than the pre-pandemic average.
Meanwhile, returning students between the ages of 20 to 24 had a jobless rate of 6.3% last month, the lowest since July 2018.
Average hourly wages for full-time permanent employees grew by 3% on an annual basis, down from 3.7% yearly growth the previous month.
–With assistance from Mario Baker Ramirez.
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Last modified: August 7, 2026
