August 2025 Labour Lowdown: Toronto’s Labour Market Falters in July
Employment Trends
Toronto’s labour market took a step back in July 2025, erasing June’s gains. The unemployment rate jumped to about 9.8% in July, up sharply from 8.4% in June and well above 7.3% in July 2024. This surge in joblessness came as more people left employment or entered the labour force without finding jobs. The employment rate (share of the population employed) slipped to 61.2% (down from 63.0% in June) but remains slightly higher than last July’s 60.7%. Similarly, the participation rate dipped to roughly 67.8% (from 68.8% in June), though it is still over 2 percentage points higher than a year earlier (around 65.5% in July 2024). In short, job growth wasn’t enough to absorb a swelling labour force, causing unemployment to rise. Even with July’s setback, Toronto’s jobless rate remains much higher than the provincial and national averages (Ontario’s is around 7.5–7.8% and Canada’s 6.9%)
The gap underscores the extra slack in Toronto’s labour market, partly due to the city’s robust population growth and immigration which continually adds new job seekers. Broader economic currents are also a factor. The U.S. tariff war that erupted earlier in 2025 continues to cast a shadow on Toronto’s trade-oriented industries, making employers cautious. Meanwhile, high interest rates, the Bank of Canada’s benchmark rate hit 5% this summer, are dampening interest-sensitive sectors like construction and real estate. At the national level, the picture is one of stagnation: Canada lost about 41,000 jobs in July (partly giving back June’s big gain) and has seen little net job growth since the start of the year, after rising throughout the spring. All told, Toronto’s labour market is stable but fragile.
Toronto Wages
Wage growth in Toronto remains moderate and relatively steady. The average hourly wage in the Toronto CMA was roughly $39 in July 2025, up from about $38 in June (which had seen a slight dip) and approximately 2–3% higher than a year ago. This year-over-year wage increase in the low-single-digits indicates that paychecks are growing a bit faster than inflation, but the pace has cooled from the rapid raises seen in 2022–2023. Notably, Toronto’s wages continue to outpace the norm in other areas. The city’s $39 average hourly rate towers over the national average (around $36.16) and sits above the Ontario average (in the mid-$37 range) a premium of roughly 6–8% above Canada as a whole. This reflects Toronto’s concentration of high-productivity, high-skill jobs (in finance, tech, professional services, etc.), as well as the higher cost of living which pushes employers to offer more competitive pay. While pay levels are high, the growth trajectory has leveled off somewhat.
Sector Performance – Hospitality Booms, Finance and Tech Stall
July’s sector-by-sector employment trends paint a mixed picture of Toronto’s economy. A few industries are surging with growth, while others have slowed or declined under economic pressures. In general, many service sectors still outshine the goods-producing ones, but even some white-collar services have hit a lull. The ongoing U.S. tariffs, high borrowing costs, and shifting consumer patterns are influencing which sectors thrive and which lag. Here’s how key sectors are faring year-over-year (July 2025 vs. July 2024):
Finance and Insurance: This sector – a longtime pillar of Toronto’s economy – has seen its expansion downshift considerably. Employment is only about +1.5% higher than a year ago (roughly 450,000 jobs in July), a marked slowdown from the ~+5% growth rates observed earlier in 2025. Banks and insurance companies have largely paused their rapid hiring as they digest economic uncertainties and weaker financial markets. The industry remains near record employment levels, but job creation has essentially stalled for now. Finance isn’t contracting, but the days of double-digit growth are gone, reflecting caution amid rising credit costs and volatile markets. Hospitality and Tourism: Booming back from its pandemic slump, this sector continues to be Toronto’s standout growth leader. Hotels, restaurants, bars, and entertainment venues saw employment surge about +7.7% year-over-year, reaching roughly 197,500 workers in July. This pace even accelerated from the +6% YOY gains a month earlier, as summer travel and festivals kept demand high. Toronto’s tourism rebound remains in full swing, summer events and a steady flow of visitors have prompted many hospitality businesses to staff up. While total employment in hospitality still hasn’t fully returned to pre-2020 peaks, the year-over-year gains indicate the sector is on a solid upswing. Many restaurants and hotels have finally filled positions that were open for months, though finding experienced staff can still be a challenge for some employers.
Creative Industries (Arts, Culture, Media & Recreation): After rapid gains in the spring, growth in Toronto’s broad creative sector slowed to a more modest pace. Employment in July was up roughly +2.5% from a year ago (around 177,600 jobs), a smaller increase than the +8% YOY seen in June. The sector – which spans everything from film production and performing arts to media and recreation facilities – is still larger than a year ago but appears to be stabilizing rather than accelerating. Earlier in the summer, several big film/TV projects and live events boosted hiring. By July, however, some of that momentum tapered off (in part because last July’s employment was already rebounding). Nonetheless, the creative field remains stronger than it was a year ago, buoyed by renewed cultural events and media production, even if the growth is no longer skyrocketing.
Education and Public Administration: This broad public-sector related category saw continued growth, though a bit slower than in prior months. Employment was about +3.7% higher than a year ago, totaling roughly 374,600 jobs across educational services and government administration. This represents solid expansion (thousands of additional teachers, school staff, and public servants hired over the year), albeit down from the roughly +7% YOY growth recorded in June. The slowdown is partly seasonal – July is typically a quieter month for education employment with the academic year on pause, so year-over-year comparisons are less dramatic. Even so, the public sector remains a steady backbone of Toronto’s job market.
Professional, Scientific and Technical Services: This sector which includes tech, consulting, legal, accounting, engineering and other professional services, has hit a plateau and inched into decline. Employment in July (around 526,700 jobs) was about –1.0% lower than a year ago, marking a slight drop after essentially flat growth earlier in the year. Earlier in 2025, this sector was treading water (0% growth); now it has dipped below last year’s level. On the bright side, the pullback is relatively small – most firms have stabilized and the worst of the tech downturn appears to be over. But uncertainty in the economy and higher costs of capital have kept many professional firms cautious about expanding payrolls. Essentially, Toronto’s professional and tech employers are in a holding pattern, waiting for clearer economic signals before resuming aggressive hiring.
Wholesale and Retail Trade: Consumer-facing industries are growing at a measured pace despite some high profile retail closures. Employment in retail and wholesale trade was up roughly +3.0% year-over-year (about 531,900 workers in July), similar to the growth rate in June. This indicates a moderate uptick in staffing compared to last summer. Toronto’s retailers and wholesalers have seen consumer spending stabilize and even improve slightly in 2025, allowing for some additional hiring.Some of the YOY job growth reflects retailers refilling positions they had cut during austerity measures in early 2025. Going forward, consumer confidence will dictate whether trade employment continues to inch up. For now, the sector has managed a small rebound after a soft patch, but any major expansion is on hold unless sales markedly strengthen.
Manufacturing: Like other sectors Toronto’s factory sector is currently stable but at risk due to tariffs. Manufacturing employment in July (approximately 352,600 workers) was essentially flat (+0.5%) compared to a year ago. This is actually a slight improvement from June, when manufacturing was dead even with its year-ago level. Earlier in 2025, manufacturers had been adding jobs at a healthy clip, but that momentum stalled in the spring amid rising costs and trade headaches. The current flatlining suggests that while manufacturing hasn’t collapsed (companies have largely held onto their workforces), they’re also not ramping up hiring. Ongoing tariffs and softer export demand have many factories in wait-and-see mode. There have been anecdotes of reduced shifts and small layoffs at certain plants, aligning with the overall stagnation. Until global trade disputes ease and input costs fall, Toronto’s manufacturers will likely remain cautious, focused on productivity rather than new hiring.
Business, Building and Other Support Services: This service category (which includes administrative support, facilities management, call centers, waste services, and more) has continued to decline over the past year. Employment is down roughly –6.3% from last July, now at about 133,000 jobs. The downturn deepened from a –5.4% YOY drop in June, indicating that conditions worsened slightly as we entered summer. Many companies in this space rely on contracts from bigger firms, so as major industries tighten budgets, support-service providers feel the squeeze. Over the past few months, numerous support service firms have cut back staff or delayed hiring in response to reduced demand. This sector’s decline is a classic secondary impact of an economic slowdown: when manufacturers, retailers, or offices scale down operations, the cleaning crews, security firms, call centers, and other support providers see work dry up. The hope is that as primary industries recover, support services will eventually stabilize, but for now, this sector remains a weak spot, shedding jobs year-over-year.
Construction and Utilities: After a long slump, this interest-sensitive sector is showing clear signs of a rebound. Combined construction and utility employment was up about +4.3% year-over-year in July, totaling roughly 229,900 workers. This builds on the surprise turnaround seen in June (+2.6% YOY), suggesting the sector has indeed hit bottom and begun climbing out. Several factors could be at play. A few major projects in the region have ramped up hiring in recent months, boosting construction payrolls. It’s also possible that year-ago comparisons are easier now (last summer saw a lull in building activity), flattering the growth rate. Regardless, the uptick is notable given that earlier in 2025 construction was contracting. Caution is warranted, though. Toronto’s construction industry still faces strong headwinds: high financing costs are curtailing new development, and many proposed projects remain on pause until interest rates or costs come down. So while the job gains are encouraging, the outlook for sustained growth remains uncertain. The sector’s health going forward will depend on whether developers regain confidence and whether planned infrastructure investments move ahead. For now, seeing construction/utilities employment above last year’s level is a welcome bright spot in an otherwise tepid economy.
Transportation and Warehousing: This remains one of Toronto’s hardest-hit sectors, though the decline is slightly less severe than it was earlier in the year. Employment in transportation and warehousing was down roughly –5.3% year-over-year in July (about 222,900 jobs, vs. ~235,500 a year ago). In June this sector had been down a daunting 10% YOY, so July’s comparison is not as stark. The industry is still significantly smaller than last summer, reflecting ongoing struggles in logistics, transit, and goods movement. Disrupted trade flows due to tariffs, and cooling consumer demand have all taken a toll on trucking firms, couriers, airlines, and warehousing operations. Freight volumes through the GTA remain uneven, and public transit agencies are facing ridership levels that have yet to fully recover, limiting transit hiring. Many transport companies have responded by freezing hiring or cutting roles to control costs. The result is a sector that, despite being vital to the economy’s functioning, has shed thousands of jobs versus a year ago. Transportation and warehousing stands out as a clear casualty of the combination of trade frictions and cost pressures, and it underscores the ripple effects those macro challenges have on local employment.
Health Care: After months of stagnation or slight declines, health-related employment has edged upward again, if only a little. The health care and social assistance sector in Toronto employed roughly 421,100 people in July, which is about +0.7% higher than July 2024 (when it was ~418,300). This marks a welcome, if modest, year-over-year increase. Earlier in 2025, Toronto’s health employment was actually below last year’s levels (in June it was down 1.5% YOY), so the July data suggest the sector may be turning a corner. Hospitals, clinics, and care facilities have been grappling with worker shortages, burnout, and budget constraints, which limited growth despite surging demand for services. Now we are seeing hints of improvement, possibly as government initiatives to train and recruit health workers begin to bear fruit (see “In Other News” below). That said, the gain is small, and the paradox remains: demand for health care is high, but staffing is only inching up. Toronto still faces a shortage of nurses, personal support workers, and other caregivers, so even this slight employment bump leaves health institutions straining. The hope is that recent efforts to expand training and expedite credentialing will gradually boost health workforce numbers in the coming months.
JobsTO Hiring Activity – Slump Persists Through Summer
Toronto’s online hiring appetite stayed historically weak through mid-summer. After a brief spring uptick, job postings cooled off in June and remained subdued in July, with employers showing no sign of the usual summer recruitment bump. The number of new online job listings in the Toronto region continues to languish far below typical levels, reflecting an abundance of caution among companies. In July 2025, active job postings hovered around the same low levels as June – roughly on the order of only 18,000–20,000 openings city-wide, which is about half the volume seen in July 2024. In other words, employers are advertising only about 50% as many jobs as they were a year ago, a stark indicator of weakened hiring demand. Likewise, the number of firms actively recruiting has dropped in tandem, as many businesses have frozen or scaled back hiring plans amid economic uncertainty. This prolonged lull follows the pattern set in the spring: postings crashed earlier in the year and, aside from a minor spring rebound, have not recovered. As a result, Toronto entered the summer with historically low recruitment activity, and that continued through July. The decline in job ads remains broad-based across virtually every industry. No sector has been spared from the posting slump. By our tracking, almost all fields had on the order of 40–70% fewer job postings this July than at the same time last year. The steepest drop has been in the transportation and warehousing sector, where online job ads have plunged roughly –70% year-over-year (consistent with that sector’s heavy job losses). Big declines are also seen in construction and utilities (around –60% fewer postings than last summer) and manufacturing (around –50% fewer), mirroring the weakness in goods-producing industries. Consumer-facing sectors are quiet too: retail and wholesale trade job ads were down about –50% from a year ago as of July, and even typically resilient white-collar fields have retrenched – for instance, finance job postings were roughly half of last year’s levels. On the public side, education and public administration listings fell nearly –50% as well, and health care postings dropped about –45%, despite ongoing staffing needs (perhaps hiring in that field is happening through other channels or delayed by budget issues). Hospitality employers posted around 50% fewer jobs than last summer, after filling many positions earlier in the post-pandemic rebound. In short, Toronto’s hiring slump spans every major industry – even the “least affected” sectors are seeing job ads down by almost half. This across-the-board pullback highlights how companies, facing trade tensions, higher costs, and an uncertain economic outlook, are erring on the side of extreme caution with new hiring. So far, there are no clear signs of improvement on the hiring front. The modest rise in job postings we saw in early spring didn’t carry into the summer. If business conditions don’t improve, the persistent lack of new openings could start to impede future employment growth, since a sustained recovery in hiring typically requires an increase in job postings. For now, all indications point to a very slow summer for recruitment in Toronto. Employers seem to be in “wait-and-see” mode – waiting for either economic clarity or cost relief (like an end to the tariff war or lower interest rates) before they ramp up hiring plans again. Until that happens, job seekers in Toronto face a challenging environment with fewer opportunities being advertised than at any time in recent years.
In Other News
Housing Market Rebounds. Toronto’s housing market showed renewed strength in July 2025, a tentative positive sign for the region’s economy. Home sales jumped 10.9% compared to July 2024 – GTA realtors recorded about 6,100 sales, making it the busiest July in four years. Even after seasonal adjustment, sales were up 13% from June’s level, indicating momentum. The uptick in activity is partly due to improved affordability: prices have come down from last year’s peak, and mortgage rates, while still high, stabilized enough to lure some buyers back. In fact, the average selling price in the GTA was around $1.05 million in July, which is 5.5% lower than a year earlier. With prices off their highs, more households are finding home ownership options within reach. Inventory has also improved, active listings rose over 26% year-over-year, giving buyers more choice.
Other Key Economic Stats:
Toronto Commercial Real Estate:
- Office Vacancy Rate: 18.0%, which is 0.2 percentage points lower than one year earlier. Despite persistent economic uncertainty and trade tensions, office vacancy in Toronto has shown a modest improvement year-over-year, suggesting some stability in leasing markets. This may lend cautious support to office‑related employment in the remainder of 2025.
- Industrial Vacancy Rate: 3.6%, up 1.0 percentage point year-over-year. Industrial space is becoming more available, potentially reflecting slower demand in logistics and warehousing – a trend that could weigh on hiring in those sectors.
Housing and Building Activity
- Housing Starts (June 2025): Only 367 new units, which is 1,603 fewer than a year earlier – indicating a sharp slowdown in residential construction activity.
- Residential Building Permits (May 2025): $473.51 million, down $1,066.7 million year-over-year – a steep drop in residential construction investment.
- Commercial Building Permits (May 2025): $252.55 million, up $43.9 million from last May – signaling some rebound in non-residential construction.
- Institutional Building Permits (May 2025): $184.61 million, up $28.6 million – indicating public/institutional investment remains stronger.
These trends suggest strong headwinds for housing construction employment, while commercial and institutional trades may offer growth areas.
(Note: These figures are from your data attachment.)
Housing Market
- Home Sales: 2,205 transactions, up 218 from a year earlier – showing increased buying activity relative to last summer.
- Average Home Price: $1,044,576, which is $42.9K lower than one year ago – reflecting easing prices amid improved sales volumes.
This mixed market may sustain activity in real estate services, finance (mortgage), and related sectors, even as housing affordability improves.
Building & Infrastructure
- Residential Permits: As above, $473.51M, down sharply year-over-year, signaling decline in housing pipeline.
- Industrial Permits: $49.25M, down $131.7M – less industrial construction activity, potentially reducing hiring in the construction trades and manufacturing support sectors.
