The Canadian labour market presented a mixed picture in July 2025, according to the latest data from Statistics Canada. While payroll employment saw a modest uptick, continuing a trend of little net change throughout the year, the number of job vacancies declined significantly. This has led to a notable increase in the unemployment-to-job vacancy ratio, signalling a shift in the dynamics between job seekers and available positions.
After a slight dip in June, payroll employment across Canada edged up by 21,600, or 0.1%, in July. Despite this monthly gain, the overall employment landscape has remained relatively stable since the beginning of the year, showing only a slight decrease compared to January 2025.
## Sectoral Shifts in Payroll Employment
Several sectors experienced growth in July, contributing to the overall increase, while others saw continued declines.
### Growing Sectors:
* **Health Care and Social Assistance:** This sector led the charge with a robust increase of 14,900 positions (+0.6%). This marks a continuation of an upward trend since late 2022, reflecting ongoing demand in these critical services.
* **Finance and Insurance:** The finance and insurance sector also saw a healthy gain of 8,700 jobs (+1.0%), more than recovering from a previous month’s decline. Growth was primarily observed in credit intermediation and insurance-related activities.
* **Accommodation and Food Services:** This sector recorded its third consecutive monthly increase, adding 2,600 jobs (+0.2%), partially offsetting earlier losses from late 2024 and early 2025.
### Declining Sectors:
* **Manufacturing:** Continuing a downward trend, manufacturing shed 4,600 jobs (-0.3%) in July, contributing to a cumulative decline of 28,000 positions since January 2025. This was broadly felt across various subsectors, including transportation equipment and machinery manufacturing.
* **Construction:** The construction sector experienced its second consecutive monthly decrease, losing 2,200 jobs (-0.2%). Since its peak in December 2024, construction employment has fallen by 13,700, primarily in specialty trade contractors and residential building construction.
## Average Weekly Earnings on the Rise
Canadians saw their average weekly earnings climb to $1,308 in July, representing a 3.3% increase compared to the previous year. Month-over-month, earnings were up by 0.6%. This growth in earnings can be attributed to various factors, including wage adjustments, shifts in employment composition, and changes in hours worked. Despite the earnings increase, average weekly hours remained largely unchanged in July but were down 0.6% year-over-year.
## Job Vacancies See Significant Drop
A notable development in July was the substantial decrease in job vacancies, which fell by 20,600 (-4.2%) to a total of 469,900 across Canada. This represents a 14.5% year-over-year reduction in available positions.
### Key Vacancy Statistics:
* **Job Vacancy Rate:** The national job vacancy rate dipped to 2.6% in July, a slight decrease from 2.7% in June and a more significant drop from 3.1% in July 2024.
* **Unemployment-to-Job Vacancy Ratio:** The ratio of unemployed persons to available job vacancies increased to 3.3 to 1, up from 3.2 in June. This is the highest ratio observed since January 2017 (excluding the pandemic period), indicating a tightening job market for job seekers. This trend is driven by both fewer vacancies and an increase in the number of unemployed individuals.
### Sectoral and Provincial Vacancy Trends:
* **Major Vacancy Declines:** Construction (-14.3%), finance and insurance (-19.4%), and agriculture, forestry, fishing and hunting (-24.4%) experienced the most significant drops in job vacancies.
* **Provinces Affected:** Alberta, Quebec, and Newfoundland and Labrador recorded the largest decreases in job vacancies in July.
* **Highest Vacancy Rates:** Other services (excluding public administration) led with a 4.1% vacancy rate, followed by accommodation and food services (3.8%) and health care and social assistance (3.7%).
* **Lowest Vacancy Rates:** Educational services (1.1%), utilities (1.3%), and management of companies and enterprises (1.4%) showed the lowest rates.
## Conclusion
July’s labour market data paints a picture of modest payroll employment gains balanced against a significant reduction in job vacancies and an increasing unemployment-to-job vacancy ratio. While average weekly earnings continue to rise, the overall environment suggests that finding employment may be becoming more competitive in certain sectors and regions. These shifts highlight the dynamic nature of Canada’s economy as it navigates ongoing economic adjustments. Researchers and job seekers alike will be keen to see how these trends evolve in the coming months.
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