Canada Just Beat Its Jobs Forecast by 5x. The U.S. Lost Jobs in the Same Month.
This week gave one of the cleanest side-by-side comparisons I’ve seen in a while.
The Numbers
Canada’s July jobs report blew past every forecast. The U.S. report, released the same morning, missed by almost as much in the other direction.
Statistics Canada said the economy added 75,100 jobs in July, more than five times the 15,000 economists in a Reuters poll had expected. Unemployment fell to 6.4%, the lowest in two years, and the gain was broad-based: wholesale and retail trade, finance, and professional services all led. Read the full StatCan release.
The U.S. Bureau of Labor Statistics released its own report at the same hour. Nonfarm payrolls fell by 23,000 in July, reversing a downwardly revised 20,000-job gain in June. Economists had expected a gain of roughly 83,000. The BLS also revised May and June down by a combined 103,000 jobs. See the BLS report.
Government payrolls fell in both countries, at very different scales. The U.S. federal government cut about 53,000 jobs in July. Canada’s public administration sector cut 15,000. In both cases, it was the private sector doing the actual work of holding the number up.
Why the Gap Is Bigger Than It Looks
Scale it to the population, and the difference gets harder to explain away.
Canada has about 41.6 million people. The U.S. has roughly 345 million, about 8.3 times as many. Put Canada’s population on a U.S. scale, and July’s 75,100 jobs become a gain of roughly 620,000.
That’s what Canada’s labour market actually did this month, sized up to the world’s largest economy. The real U.S. report, released the same morning, showed a loss of 23,000.
Zoom out to the last quarter, and the pattern holds. Canada added 181,000 jobs between April and July. At the U.S. population size, that’s roughly 1.5 million jobs. The U.S. itself added about 60,000 over the comparable May-to-July stretch, with July alone negative.
The Participation Rate Tells the Real Story
A falling unemployment rate isn’t always good news. Sometimes it just means people stopped looking.
In the U.S., the unemployment rate dipped to 4.1%, but the labor force participation rate fell to 61.4%, its lowest level in more than five years. That’s people leaving the workforce, not finding jobs.
Canada’s participation rate moved in the opposite direction, rising to 65.1%. More Canadians looked for work in July, and more of them found it.
Both countries did see wage growth cool. Canada’s slowed to 2.8% year-over-year, the U.S.’s to 3.2%, its slowest pace since 2021. Neither labor market is running hot. But one of them is actually growing.
A note from me: this doesn’t make Canada’s economy bulletproof, and I said so above about wages. But when the same week produces a Canadian jobs report that beat forecasts by 400% and a U.S. report that missed by more than 100%, the comparison is worth making honestly, with the real numbers, instead of letting either country’s spin machine tell you what it means.
If someone could send one of those jobs this way that would be much appreciated.