Employment increased by 75,000 (+0.4%) in July and the employment rate rose 0.1 percentage points to 60.9%. The unemployment rate declined 0.1 percentage points to 6.4%, the lowest rate since July 2024, reported Statistics Canada on Friday.
Employment increased in wholesale and retail trade (+21,000; +0.7%); finance, insurance, real estate, rental and leasing (+18,000; +1.2%); professional, scientific and technical services (+17,000; +0.8%); as well as in construction (+16,000; +1.0%). In contrast, employment declined in public administration (-15,000; -1.2%) and agriculture (-9,600; -4.3%), noted the federal agency.
“Wholesale and retail trade (+21,000; +0.7%) recorded the largest employment increase across industries in July. Despite the monthly increase, employment in this industry was down by 50,000 (-1.7%) compared with 12 months earlier, largely reflecting a downward trend observed from January to May 2026,” said Statistics Canada.
Overall employment rose among core-aged people (25 to 54 years old) (+51,000; +0.4%), mostly for women in that age group (+33,000; +0.5%), it said.
The unemployment rate for core-aged women fell 0.3 percentage points to 5.2%, while it held steady for core-aged men (5.8%), youth (12.6%), and people aged 55 and older (5.2%).
There were more people working in Ontario (+52,000; +0.6%), British Columbia (+18,000; +0.6%), Manitoba (+5,900; +0.8%), and Nova Scotia (+4,600; +0.9%).
Average hourly wages among employees were up 2.8% (+$1.01 to $37.17) on a year-over-year basis in July, following growth of 3.3% in June (not seasonally adjusted), added Statistics Canada.
Since April, total employment was up by 181,000 (+0.9%), driven by a rise in full-time work (+193,000; +1.1%), said Statistics Canada.
The employment rate—the proportion of the population aged 15 and older who are employed—increased by 0.1 percentage points to 60.9% in July. The rate was up 0.2 percentage points compared with 12 months earlier, it said.
“In July, the number of private sector employees rose (+58,000; +0.4%), as did the number of self-employed workers (+44,000; +1.6%). These gains were partially offset by a decline in the number of public sector employees (-27,000; -0.6%). Since April, employment growth has been concentrated among private sector employees (+146,000; +1.1%) and self-employed workers (+73,000; +2.7%),” explained Statistics Canada.
Unemployment rate by province and territory, July 2026
Restaurants Canada said restaurants were the biggest creator of youth jobs in July compared to last year, according to Statistics Canada’s latest Labour Force Survey.
“In the first seven months of 2026, the restaurant and accommodation industry employed an average of 51,400 more young people than during the same period last year, a 11.4% increase, with restaurants accounting for 85% of those jobs,” said the national organization in a LinkedIn post. “Restaurants are Canada’s leading source of first-time jobs and career-building opportunities, representing one in six youth jobs.
“As youth unemployment remains a national challenge, investing in restaurants means investing in the next generation of Canada’s workforce.”
Andrew Grantham, Senior Economist, CIBC Capital Markets, said the report suggests that growth momentum seen in the second quarter may have carried on into the start of Q3.
“However, at 6.4% the unemployment rate is still roughly half a per cent higher than where we estimate full employment lies, and therefore not yet at a level that will fuel domestically-driven inflation. As a result we continue to see the Bank of Canada remaining on hold this year and into the start of 2027.”
Doug Porter, Chief Economist, BMO Capital Markets, said: “Not unlike the GDP bounce from weakness at the turn in the year, the job figures are very much echoing the rebound. But, perhaps also like the GDP results, the recent job growth likely exaggerates the underlying strength in the economy. Even with the flashy headlines, we suspect that the yearly trend in both is more indicative of economic reality—job growth of just under 1% y/y and GDP growth of just under 2% y/y. Still, the big July gains are a hint of building momentum after the Q2 rebound, even as trade uncertainty still looms over the outlook. With wage growth taming further and energy prices more moderate, the BoC won’t take on a more hawkish tone yet, though a strengthening economic backdrop will could eventually push them in that direction if it persists.”
Andrew Hencic, Senior Economist, TD, said it was another strong labour market report.
“Beyond just the jobs gains, the fall in the unemployment rate was encouraging given hiring outpaced a sizeable 61K gain in the labour force. This shows the economy was able to absorb more labour market slack in July. When coupled with the strong bounce-back in activity in the second quarter, some additional momentum on jobs in July is nice to see,” he said.
“The labour market is showing clear signs of recovery, but the 6.4% unemployment rate continues to signal an economy operating with some slack. Together with the prospect of new tariffs coming into effect on August 19th, the downside risks to the economy remain. We continue to expect the unemployment rate to gradually decline in the coming months as the economy deals with the volatility in energy prices and potentially more trade headwinds. Given this backdrop we expect the Bank of Canada to stay on hold for the rest of the year.”
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