📉 Canada Sheds 40,000 Jobs in July
August 10, 2025
Canada lost 40,000 jobs in July, pushing the national unemployment rate to 6.4%—the highest it’s been since early 2022 (CBC). This marks the third straight monthly increase in joblessness, with full-time work seeing the steepest drop.
Wage growth is still running hot at 5%, but that may say more about inflation expectations than labour strength. Meanwhile, job losses were spread across sectors, with construction, public administration, and natural resources taking hits—despite continued population growth that should, in theory, be fuelling demand.
Our Take: In isolation, one month of job losses isn’t a red flag. Especially when it follows a string of gains. We added over 100,000 jobs between April and June, so July's drop might seem like a simple correction. But context matters. Canada's unemployment rate is now 6.4%—the highest since early 2022, and a full percentage point above where we were just a year ago. That kind of climb, especially when population is surging, is reason to pause.
More importantly, this may be the first sign that recent job gains weren’t a reflection of underlying strength, but a temporary spike driven by businesses rushing to front-load activity before tariffs, interest rate pivots, and economic uncertainty hit full force. The growth, in other words, may have been defensive. Now the hangover begins.
It’s too early to panic—but not too early to get serious. The system is under strain. And if policymakers want to avoid a deeper downturn, it’s time to shift focus from soft landings to hard investments.
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