Economy

The July 2026 Employment Situation showed total nonfarm payrolls fell by 23,000, driven by a 53,000 drop in government employment, primarily from local government education losing nearly 50,000 positions. Combined downward revisions to May and June removed an additional 103,000 jobs from prior counts, though the BLS notes its 90% confidence interval of plus or minus 122,000 means the data cannot statistically confirm the direction of the monthly change. The unemployment rate edged down to 4.1% while the labor-force participation rate fell to 61.4%, down 0.7 percentage point since January.

The New York Fed's July 2026 Survey of Consumer Expectations recorded median one-year-ahead inflation expectations at 3.6%, down 0.1 percentage point from June, while three- and five-year measures held steady at 3.3% and 3.0% respectively. The perceived probability of higher unemployment one year ahead rose 1.1 percentage points to 42.8%, broad-based across age and income groups, though the job-loss probability of 14.2% remained below its 12-month average. The survey does not publish confidence intervals or statistical-significance thresholds, so the practical weight of any single month-to-month change cannot be formally assessed from the released data.

Statistics Canada's July Labour Force Survey recorded a 75,000-job gain, roughly four to five times what economists had forecast, pushing the unemployment rate down a third consecutive month to 6.4%, its lowest since July 2024. Ontario accounted for 52,000 of the national increase, while wholesale and retail trade led industry gains at 21,000 jobs. The result arrives as new U.S. Section 338 tariffs covering an estimated $20 billion of Canadian imports are scheduled to take effect August 19, providing context for near-term labour market risk.