Employment was little changed in November (+25,000; +0.1%) and the employment rate fell 0.1 percentage points to 61.8%, as growth in the population continued to outpace employment growth, reported Statistics Canada on Friday.
Edmond Dantès
The federal agency said unemployment rate rose 0.1 percentage points to 5.8%, continuing an upward trend observed since April.
Employment increased in manufacturing (+28,000; +1.6%) and construction (+16,000, +1.0%). There were declines in wholesale and retail trade (-27,000; -0.9%) and finance, insurance, real estate, rental and leasing (-18,000; -1.3%), it said, adding that employment increased in New Brunswick (+2,400; +0.6%) and declined in Prince Edward Island (-1,300; -1.4%). Employment was little changed in all other provinces.
Among Canada’s 20 largest census metropolitan areas (CMAs), St. Catharines–Niagara and Oshawa recorded the largest unemployment rate increases from April to November (three-month moving averages).
Total hours worked fell 0.7% in November and were up 1.3% on a year-over-year basis. On a year-over-year basis, average hourly wages rose 4.8% (+$1.57 to $34.28) in November, similar to the increase recorded in October (not seasonally adjusted), added StatsCan.
“Most immigrants who had arrived in the previous five years faced challenges finding work related to their post-secondary credentials or work experience acquired abroad (population in the labour force aged 15 to 69, not seasonally adjusted),” said the report.
The employment rate has decreased in four of the past five months, and has generally trended down since January 2023, when it reached a recent high of 62.5%, it said.
“The number of private sector employees rose by 38,000 (+0.3%) in November, the first increase since June. Meanwhile, the number of self-employed workers decreased by 25,000 (-0.9%), partly offsetting cumulative increases of 76,000 (+2.9%) in August and September. The number of public sector employees was little changed in November, but was up by 98,000 (+2.3%) from June,” added the report.
“Of those who were unemployed in November and had worked in the previous year, more than two-thirds (68.7%) had been laid off from their previous job, compared with 62.6% in November 2022. In comparison, less than one-third (31.3%) of the unemployed in November 2023 who had worked in the previous year had voluntarily left their job, down from 37.4% in November 2022 (not seasonally adjusted).”
Unemployment rate by province and territory, November 2023
“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,” said James Orlando, Senior Economist with TD Economics.
“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.”
Partially echoing yesterday’s GDP report, Canada’s economy is hanging in, but the clear softening in the labour market is consistent with continued soft growth, said Benjamin Reitzes, Managing Director at BMO Capital Markets.
“While the headline increase was better than expected, the ongoing increase in the unemployment rate is the bigger story, and likely better reflects the state of the economy. Nothing here to shift expectations for the BoC to stay on the sidelines next week,” he said.
Further softening in labour market data after a soft Q3 GDP report yesterday should reinforce that the Bank of Canada is done hiking interest rates for now, said Nathan Janzen, Assistant Chief Economist, Royal Bank of Canada.
“Higher unemployment to-date has come mostly via slower hiring rather than more firing. Wage growth is running hot, but should cool going forward as labour demand cools relative to supply – November was the first month since the pandemic that Canadian businesses reported insufficient demand for their products as a bigger concern than labour shortages. The BoC will also be cautious about pivoting to rate cuts too quickly, but our own assumption is that they will start to push the overnight rate lower in the second half of next year,” he said.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list
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