Muhammad Aman Ullah | August 8, 2026
The True Post (News) — Canada’s labor market performed significantly better than expected in July 2026, adding 75,100 new jobs, while employment in the neighboring United States moved in the opposite direction, with the U.S. economy losing 23,000 jobs during the same period. The latest figures highlight a clear contrast between the labor markets of the two North American economies.
Canada Adds Far More Jobs Than Expected
Canada added 75,100 jobs in July, significantly exceeding economists’ expectations. Economists had forecast an increase of around 20,000 jobs, but the actual gain was several times higher than expected.
The stronger job market also helped lower Canada’s unemployment rate. The unemployment rate fell from 6.5 percent in June to 6.4 percent in July, reaching its lowest level in two years.
Which Sectors Added Jobs?
The wholesale and retail trade sectors led employment growth in Canada during July. Employment also increased in finance, insurance, real estate, rental and leasing.
Professional, scientific and technical services, along with the construction sector, also contributed to overall employment growth. The figures come as Canada’s economy continues to face the effects of trade tensions and uncertainty in global economic conditions.
Canadian Dollar Also Strengthens
The stronger-than-expected employment figures also affected the Canadian dollar. The Canadian currency climbed to an eight-week high against the U.S. dollar as the strong labor market data boosted investor confidence in the Canadian economy.
U.S. Loses 23,000 Jobs
The U.S. labor market, meanwhile, delivered disappointing results in July. The U.S. economy lost 23,000 nonfarm jobs, despite economists expecting employment to increase.
It was the first monthly decline in U.S. employment in five months.
The U.S. unemployment rate nevertheless fell to 4.1 percent. However, much of the decline was attributed to people leaving the labor force. Around 264,000 people exited the U.S. labor force in July, while the labor force participation rate fell to 61.4 percent, its lowest level in approximately five and a half years.
Canada Adds 54,000 Jobs in November, Unemployment Falls Significantly
Which U.S. Sectors Lost Jobs?
The most significant decline in the United States occurred in local government education, where approximately 49,600 jobs were lost.
The leisure and hospitality sector also recorded a decline of around 40,000 jobs, while employment also fell in the retail and financial sectors.
By contrast, construction and healthcare each added around 22,000 jobs, while manufacturing added approximately 5,000 positions.
Overall, the private sector added 30,000 jobs. However, a decline of 53,000 jobs in the government sector pushed the overall employment figure into negative territory.
Previous U.S. Employment Figures Revised Lower
Another concern for the U.S. labor market came from significant downward revisions to employment figures for May and June.
Following revisions to previous data, total job growth for those months was reduced by 103,000 jobs compared with earlier estimates.
Impact on Interest Rate Expectations
The weaker U.S. jobs report also changed market expectations regarding interest rates.
Following the release of the report, expectations for the U.S. Federal Reserve to raise interest rates in September declined. Before the report, markets had estimated a 57 percent probability of a September rate hike. That probability later fell to around 44 percent.
A Clear Contrast Between Canada and the U.S.
The July employment figures present a sharply different picture of the labor markets in North America’s two largest economies.
Canada created significantly more jobs than expected, while its unemployment rate fell to a two-year low. In contrast, the unexpected decline in U.S. employment has raised fresh questions about the strength and direction of the American labor market.
The contrasting figures could also influence economic policy, currency markets and expectations surrounding interest rates in both countries in the months ahead.
