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Canada's labor market posted a stronger performance than expected in July, adding 75,100 jobs while the unemployment rate dropped to its lowest point in two years, according to official data released Friday.
The jobless rate declined to 6.4% from 6.5% in June, according to Statistics Canada. Economists had expected employment to rise by 17,800 and the unemployment rate to remain unchanged at 6.5%.
Employment increased by 181,100 between May and July, marking the strongest three-month gain since before the US began imposing tariffs on Canadian goods.
The increase was driven by full-time positions and concentrated among private-sector employees and self-employed workers. Total hours worked rose 0.6% in July.
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Wholesale and retail trade recorded the largest employment gains, followed by finance, insurance, real estate, professional and technical services, and construction. Public administration posted the biggest decline.
The unemployment rate among returning students aged 15 to 24 fell 2.4 percentage points from a year earlier to 15.1%. Among those aged 20 to 24, the rate dropped to 6.3%, its lowest July level since 2018.
Average hourly wages for permanent employees rose 3% year-on-year, slowing from a 3.7% increase in June.
The stronger-than-expected figures indicate that Canada's economic recovery retained momentum at the start of the third quarter despite continued uncertainty over trade relations with the U.S.
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