Ottawa, August 9, 2025 – Canada’s labour market took a significant hit in July, shedding 40,800 jobs and reversing much of the strong hiring seen in June, when the economy had added 83,000 positions. The drop pulled the employment rate down to 60.7%, marking its lowest level in eight months, according to data released by Statistics Canada on Friday.
Despite the job losses, the unemployment rate held steady at 6.9%, remaining near multi-year highs. The figures came in weaker than expected, as analysts had projected an increase of 13,500 jobs and a rise in unemployment to 7%.
Youth workers bore the brunt of July’s downturn. Employment among those aged 15 to 24 fell sharply, pushing their unemployment rate to 14.6% the highest since September 2010, excluding pandemic years. Their employment rate dropped to 53.6%, the lowest since November 1998 outside the pandemic period.
Manufacturing employment declined by close to 10,000 positions on a yearly basis. Sectors tied to steel, aluminium, and autos continued to struggle, with hiring intentions dampened and layoffs increasing. In addition, the information, culture, and recreation sector lost 29,000 jobs in July, construction declined by 22,000, and business, building, and other support services fell by 19,000.
The average hourly wage for permanent employees rose 3.5% year-over-year to C$37.66, up from a 3.2% gain in June. Wages are closely monitored by the Bank of Canada as an indicator of potential inflationary pressure.
The Bank of Canada left its key interest rate unchanged last week, citing labour market strength among its considerations, but indicated it may cut rates if economic growth slows and inflation remains under control. Following the jobs report, money market expectations for a rate cut at the next policy meeting on September 17 rose to 38%, up from 27% a day earlier.
Overall, Statistics Canada noted that net employment growth has been minimal since the start of the year, with the layoff rate holding steady at 1.1% compared to July 2024.
