| Consensus | Consensus Range | Actual | Previous | |
| Employment - M/M | 12,500 | 5,000 to 25,000 | 75,100 | 18,200 |
| Unemployment Rate | 6.5% | 6.5% to 6.5% | 6.4% | 6.5% |
| Participation Rate | 65.1% | 65.0% |
Highlights
The Canadian job market proved stronger than expected in July, as the economy added 75,100 jobs on the month, topping the highest forecast of 25,000 in an Econoday survey, following gains of 18,200 in June and 87,800 in May.
Confirming the recent downward trend, the unemployment rate edged down to 6.4 percent in July from 6.5 percent in June, 6.6 percent in May and 6.9 percent in April. The last time the unemployment rate was this low was in July 2024.
The participation rate rose to 65.1 percent in July from 65.0 percent in June, the highest level since December 2025.
While the Bank of Canada expects activity to rebound in the second quarter following two quarters of contraction, it projects a slower GDP growth momentum to an annualized rate of 1.5 percent in Q3 from 2.5 percent in Q2. Today's report points to an upside risk to Q3's outlook.
Depite the employment upside surprise, the Bank of Canada might not rush into tightening territory as the average hourly wage growth among employees slowed to 2.8 percent year-over-year in July, down from 3.3 percent in June.
Employment gains were split between full-time and part-time positions. Full-time employment was up 38,600 in july after a meager 600 jobs added in June in the wake of a 154,000 surge in May. Part-time employment was up 36,600 in July, the largest increase since November 2025, after rising 17,500 in June but decreasing 66,200 in May.
The job finding rate, measuring the proportion of unemployed people who found a job between June and July, was 20.8 percent, up from 18.5 percent a year earlier, but still below the pre-pandemic average of 26.6 percent.
Private-sector employment increased 57,900 in July, while the public sector shed 27,000 jobs. Self-employment was up 44,400, the largest gain since August 2023. It is unclear whether self-employment numbers are refecting a weaker underlying labor market state than the headline suggests.
The industry breakdown shows services led the increase in July, with 64,400 jobs. Goods-producing industries added 10,800 positions, led by gains of 15,700 in construction and 11,100 in manufacturing.
Within services, wholesale and retail trade was up 21,100, finance, insurance, real estate, rental and leasing up 18,000, and professional, scientific and technical services 16,600. Employment in public administration fell 14,500.
Market Consensus Before Announcement
Jobs seen up a modest 12,500 in July after rising 18,200 in June. No change is expected in the jobless rate at 6.5 percent in July.
Definition
The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.
Description
As in the U.S., this report is used as an indicator of the health of the domestic economy. Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.
The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.