Canada’s Labour Market Posts Decent Gain in November

The Canadian labour market added 24.9k positions in November, with full-time employment up 59.6k and part-time employment down 34.7k.

The unemployment rate rose 0.1 percentage point to 5.8% and the participation rate was unchanged at 65.6%.

Employment by sector showed gains in manufacturing (+28k) and construction (+16k), while losses were seen in wholesale/retail trade (-27k) and finance, insurance, real estate, rental and leasing (-18k).

Lastly, total hours worked fell 0.7% month-on-month and wages were up 4.8% year-on-year (flat versus October).

Key Implications

Today’s job gain was quite healthy with full-time jobs in the cyclically sensitive private sector driving the increase. But still, the 25k increase in the net number of Canadians finding jobs again failed to keep up with the 78k increase in population and the 36k boost to the labour force. The number of unemployed Canadian workers continues to grow (197k increase over 2023), forcing the unemployment rate higher again. As we have been talking about for some time, there are factors in the Canadian economy that will provide a buffer for the job market (see construction hiring), which is keeping the soft-landing scenario on track.

Today’s report alongside yesterday’s negative GDP print will be enough for the Bank of Canada (BoC) to hold its policy rate steady when it meets next week. While we aren’t expecting the BoC to signal victory, the Bank will be able to project greater confidence that the process is working. This rhetoric will likely continue over the coming months, before it switches gears and starts to signal the beginning of rate cuts in the spring.