Statistics Canada says employment was little changed last month as the economy lost a modest 6,400 jobs.
Meanwhile, the unemployment rate ticked up to 5.5 per cent amid population growth.
July marks the third consecutive month that the unemployment rate has risen, signalling some loosening in the labour market.
Wage growth bounced back last month, however, rising 5.0 per cent year-over-year.
The federal agency says job losses were led by the construction industry, while the greatest job gains were made in health care and social assistance.
Rising unemployment comes as high interest rates weigh on the economy, making borrowing more expensive for both businesses and consumers.