‘Not yet strong’: Canada adds surprise 75,000 jobs in July but recovery still ongoing

**OTTAWA** — Canada’s economy added a stronger-than-expected 75,000 jobs in July, driving the unemployment rate down to its lowest level in two years at 6.4 per cent, according to data released Friday by Statistics Canada.

The figures outperformed a Reuters poll of economists, which had predicted a modest gain of 15,000 jobs ahead of the release. July’s job growth was divided between full-time and part-time positions, with Ontario accounting for 52,000 of the new jobs.

Statistics Canada reported that the country has added 181,000 jobs since April and is up 196,000 positions compared to a year ago. The national unemployment rate has dropped by half a percentage point year-over-year.

Despite the positive figures, economists emphasize that the recovery is ongoing and that the labor market requires further improvement before the Bank of Canada contemplates altering its monetary policy.

“It’s stronger growth than we were maybe anticipating a few months ago,” said CIBC senior economist Andrew Grantham. He added that the data aligns with GDP figures showing economic recovery, though slack remains in the economy and the recovery must continue before rate hikes become a concern.

RBC assistant chief economist Nathan Janzen offered a similar assessment in a note to clients, stating, “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.”

Average hourly wages increased by 2.8 per cent year-over-year in July, slowing down from a 3.3 per cent growth rate in June.

Sector-specific data showed that wholesale and retail trade led gains with 21,000 new positions, though that sector remains down 50,000 jobs from a year ago. Finance, insurance, real estate, rental, and leasing added 18,000 jobs, while professional, scientific, and technical services added 17,000. Conversely, the public administration sector lost 15,000 jobs, and agriculture shed 9,600 positions.

Desjardins managing director Royce Mendes noted that while businesses are navigating trade-related uncertainty, full labor market health has not been restored. Mendes estimated that a Bank of Canada interest rate hike is unlikely to occur until 2027.

The Bank of Canada held its key policy rate steady at 2.25 per cent in mid-July for the sixth consecutive time. Financial market odds compiled by LSEG Data & Analytics indicate a 96 per cent probability that the central bank will hold rates steady again at its upcoming meeting on September 2.

Meanwhile, the youth unemployment rate remained virtually unchanged in July at 12.6 per cent, marking a 1.9 percentage point decrease from the previous year.

“This is definitely a better summer than what we’ve seen in the last two years for young people trying to find jobs,” Grantham said.

Article source: piquenewsmagazine.com | Image credit: The Canadian Press