Canada July Jobs Surge 75.1K, Unemployment Falls to 6.4%

The mix of strong hiring and slower wage growth presents a mixed signal for policymakers. The Bank of Canada next meets September 4. Before the report, markets had priced in roughly a 50% chance of a rate cut, based on overnight index swaps.

July's employment gain was broad-based. Full-time jobs, which had barely moved in June, accounted for more than half of the increase. Part-time jobs also grew solidly, adding to the overall strength.

The unemployment rate fell to 6.4% from 6.5%, in line with expectations. The prior month had seen the rate hold at 6.5% for two consecutive months. The decline suggests the labor market is absorbing new entrants, though the pace remains moderate.

Average hourly wages year-over-year slowed from 3.7% to 3.0%, the lowest reading since early 2025. That figure is closely watched by the BoC as a measure of underlying wage inflation. The slowdown, if sustained, would reduce one source of upward pressure on services prices.

Statistics Canada's report also showed the employment-to-population ratio held steady at 61.8%, while total hours worked rose 0.3% in July. The data set comes ahead of the August employment report, due September 4, the same day as the BoC's next rate decision.