Market News

By Robb M. Stewart

OTTAWA--Canada's jobless rate continued to push higher last month with an increase in layoffs and as the pace of hiring was again outpaced by hot population growth.

The number of employed working-aged people in Canada rose a modest 24,900 in November from the month before, while the unemployment rate was 0.1 percentage point higher at 5.8%, the first time it has broken above pre-pandemic levels since January 2022, Statistics Canada reported Friday.

The jobless rate increased for a second straight month and has now climbed 0.8 percentage point since April. Though still low historically, that compares with the record low of 4.9% in the middle of last year as the labor market continues to loosen despite high levels of immigration.

The further indication the economy is struggling under still-elevated inflation and higher borrowing costs is likely to offer some comfort to central bank policy makers ahead of next week's meeting, though steady wage growth suggests a hawkish tone won't be dropped just yet.

Market expectations were for hiring to add 14,000 jobs and an unemployment rate of 5.8%.

When calculated using U.S. Labor Department methodology, Canada's unemployment rate ticked down 0.1 percentage point to 4.7%.

The data agency noted that of those unemployed in November, more than two-thirds had been laid off from a previous job, a increase from just under 63% a year earlier. And roughly 31% of people who were unemployed in November who had worked in the previous year had voluntarily left their job, down from just above 37% last year.

At the same time, the country's working-age population climbed by 77,700 during November and the employment rate--the proportion of people 15 years and older with a job--slipped 0.1 point to 61.8%. Statistics Canada has estimated that monthly job gains of roughly 50,000 a month are needed for the employment rate to hold steady given the growing population.

The jobs data are one of the last major indicators before the Bank of Canada decides on interest rates next week and whether its past aggressive rate increases have sufficiently tamed excess demand in the economy are high enough to allow inflation to continue easing.

The central bank has projected economic growth, which contracted on an annualized basis in the third quarter, will remain subdued before picking up again late next year. The bank lifted its policy rate to a more than two-decade high of 5% from 0.25% in 16 months with the most recent back-to-back increases in June and July.

Wage growth, a key area of concern for the bank, held steady after easing the month before. Average hourly wages for permanent employees again rose 5.0% in November, a signal of lingering inflationary pressures and well above the central bank's 2% target for consumer price inflation.

The November data showed total hours worked was down 0.7% in November, though up 1.3% from a year earlier.

All of the jobs added in November were in full-time employment, which rose by 59,600 from the previous month to more than offset a drop of 34,700 in part-time jobs.

Employment increased in manufacturing, countering a decline in October, and was up for a second consecutive month in the construction industry, bringing employment levels to within 15,000 of the peak reached in January and after declines through the spring and summer.

There were fewer jobs for the month in wholesale and retail trade, building on a fall in October, and employment also fell in the finance, real estate, rental and leasing sectors.

The ranks of private-sector employees rose by 0.3% in November, the first increase since June, while the number of self-employed workers decreased by 0.9%, partly offsetting increases in August and September. The number of public-sector employees was little changed in November, but have increased 2.3% from June, the agency said.

Write to Robb M. Stewart [email protected]