Canada adds 75,000 new jobs in July, unemployment rate lowest in 2 years

In July, US employers unexpectedly lost 23,000 jobs, marking a further decline in the already weakened labor market. The previous two months' job gains were revised down by a combined 103,000 positions, painting a grim picture of the current employment situation. Economists had anticipated an unchanged unemployment rate and 83,000 new jobs for the month, but the actual data revealed a more dire scenario.

The unemployment rate remained steady at 4.1%, failing to budge from its previous level. The Bureau of Labor Statistics' latest report highlights the ongoing slump in job growth, exacerbated by the ongoing conflict in the Middle East. The loss of 23,000 jobs was concentrated in local government education, with 50,000 positions cut, and retail, losing 19,000 jobs.

Despite the overall decline, the private sector managed to add 30,000 jobs, primarily in the healthcare sector. Hourly earnings for all employees remained relatively stable, increasing by 3.2% compared to last year. However, the question remains whether these gains have kept pace with inflation, as next week's consumer pricing data will shed more light on the matter.

Revisions for May and June show a significant downward adjustment, with 103,000 jobs added in May and 20,000 in June, down from initial estimates of 129,000 and 37,000, respectively. Job openings have also decreased, falling by 178,000 to 7.4 million in June, with a particular decline in healthcare and social assistance.

Recent data from the ADP payroll firm suggests that private employers added only 44,000 jobs in July, a sharp contrast to the 98,000 positions added in June. Job openings in June also decreased by 178,000 to 7.4 million, with healthcare and social assistance witnessing the most significant drop in openings since July 2025.

The latest data from outplacement firm Challenger, Gray and Christmas indicates that layoffs in July were the lowest in two years, totaling 33,500 job cuts. While consumer spending has remained resilient, increasing by 0.3% in June 2026, the personal savings rate for Americans reached a four-year low of 2.7% in June 2026, according to the US Bureau of Economic Analysis.

Economists are closely watching the labor market and inflation as the Federal Reserve grapples with the decision to raise interest rates or maintain the status quo. The annualized inflation rate in June stood at 3.5%, 0.8% higher than a year ago. The Federal Reserve's next meeting may be influenced by the upcoming inflation data, with the possibility of at least one rate hike to combat price increases in the offing.