Canada adds 75,000 jobs in July as unemployment falls to two-year low

Canada's labor market demonstrated robust recovery in July, adding 75,000 jobs and pushing the unemployment rate down to 6.4 percent. This figure significantly surpassed analyst forecasts, which predicted only 20,000 new positions, signaling that the Canadian economy is adapting to U.S. tariffs.

Hiring was broad-based, encompassing both full-time and part-time roles across various sectors, including finance and construction. This strong performance contrasts with the United States, which reported a job loss of 23,000 in July, falling short of expectations.

TD Bank described the labor market as showing "clear signs of recovery" and predicted further unemployment declines. However, the outlook is tempered by "downside risks," notably the threat of 50 percent U.S. tariffs on select Canadian goods scheduled for August 19.

Prime Minister Mark Carney's government is actively working with Washington to avert these new levies while simultaneously pursuing a revised North American free trade agreement (USMCA). Although President Trump praised the USMCA during his first term, he now claims it does not serve U.S. interests and seeks significant changes. While most U.S.-Canada trade remains tariff-free, Trump's tariffs have already breached key parts of the USMCA, and a broader collapse in bilateral free trade could severely impact the Canadian economy.