Canada’s unemployment rate held at 6.9 percent in July while total employment fell by a net 40,800 positions, Statistics Canada reported. The employment rate slipped to 60.7 percent, reflecting fewer people working relative to the population, and participation edged lower as fewer people were in the labor force. The monthly survey covers conditions for July 13 to July 19.
Operative result: the July Labour Force Survey shows employment declined by 41,000 on a seasonally adjusted basis, the jobless rate was unchanged at 6.9 percent, and the participation rate fell 0.2 percentage points to 65.2 percent. Unemployment rate refers to the share of the labor force that is not working and seeking work; participation rate captures those working or seeking work.
The headline stability masks important internal shifts. Youth bore most of the losses, with employment among those 15 to 24 down by 34,000 and their unemployment rate up to 14.6 percent. Statistics Canada notes that the youth employment rate fell to 53.6 percent, the lowest for July since 1998 outside the pandemic years, signaling a weak summer job market and a slower transition from school to work.
Industry detail points to a split economy. Information, culture and recreation lost 29,000 jobs and construction declined by 22,000 after months of little change. Business, building and other support services fell by 19,000, and health care and social assistance gave back 17,000 after a similar-sized gain in June. Transportation and warehousing was a rare bright spot, adding 26,000 jobs.
Provincial patterns were mixed. Alberta lost 17,000 jobs and saw unemployment rise to 7.8 percent. British Columbia shed 16,000 jobs with unemployment at 5.9 percent. Saskatchewan added 3,500 jobs and posted the lowest unemployment rate among provinces at 5.0 percent. Ontario was little changed, while Quebec’s unemployment rate declined to 5.5 percent as fewer people searched for work. Toronto’s jobless rate stood at 9.0 percent on a three-month average basis.
The composition of employment tilted away from full-time roles. Full-time work fell by 51,000 while part-time was little changed, consistent with employers managing costs by trimming hours or delaying permanent hires. Total hours worked slipped 0.2 percent on the month and were up 0.3 percent from a year earlier, signaling flat labor input even before accounting for productivity. Average hourly wages rose 3.3 percent year over year to $36.16, a modest acceleration from June.
Labor market churn remains a pressure point. Long-term unemployment, defined as 27 weeks or more without work, accounted for 23.8 percent of all unemployed people, the highest share since 1998 outside the pandemic period. Statistics Canada also reports that a larger share of those unemployed in June remained unemployed in July compared with the same months of 2024, suggesting slower re-employment even as layoffs themselves remain near pre-pandemic norms.
The participation retreat helped keep the jobless rate steady despite the employment drop. Participation fell 0.2 percentage points to 65.2 percent, indicating some potential workers are sitting out. By definition, the unemployment rate tracks the share of people without work who are actively seeking it; when fewer people look, the rate can hold steady even as job counts fall. This dynamic complicates simple interpretations of headline unemployment as a gauge of slack.
The survey’s timing and coverage matter for policy. Statistics Canada’s July estimates capture the mid-month reference week and reflect a sample of about 65,000 households. The next Labor Force Survey, covering August, is scheduled for release on Friday, September 5. Policymakers and markets will parse whether July’s setback extends into late summer or proves a one-month pause after June’s gain.
What it does to the policy path is the next question
The Bank of Canada’s next interest rate announcement is set for Wednesday, September 17, part of its fixed 2025 schedule. A weaker employment profile, easing participation, and slower hours worked give the central bank additional evidence on economic slack as it assesses the outlook for inflation and growth this fall. The July labor reading will factor into those deliberations.
Outlook and Policy Implications
A jobless rate stuck near a multi-year high alongside falling employment signals a labor market losing momentum, with youth and construction most exposed to slower hiring and project delays. Wage growth remains positive but is not accelerating, which limits household demand support. Watch the September 5 jobs report for confirmation of trend, followed by the September 17 rate decision for the policy response.
