Canada Employment Research Brief

Labour market shows first major signs of softening. Canada’s economy shed 40,800 jobs in July – well below the consensus estimate of a modest increase. While this marks the largest monthly drop since early 2022, Canada’s labour market has shown some resilience over the first half of the year amid ongoing trade uncertainties. Year-to-date employment gains as of July are hovering just above 100,000 positions, and the unemployment rate – which was unchanged last month – has only risen 30 basis points to 6.9 per cent. Nevertheless, July’s labour report highlights risks that should be monitored. The decline in employment was concentrated in the private sector, where it was broad-based across industries; it was also entirely driven by full-time employment. Meanwhile, hours worked fell by 0.2 per cent, suggesting GDP growth could be slowing faster than expected.