Data Flashes

The Bottom Line

A 54k jump in Canadian employment in November was (for a third straight month) significantly firmer than expected, and the unemployment rate fell 0.4 ppts to 6.5% – the largest one-month decline since February 2022 when labour markets were being impacted by the timing of pandemic lockdowns.

Employment gains in November were (for a second straight month) all in part-time jobs, and concentrated in younger workers. But the typically more stable 25-54 year-old unemployment rate also declined by 0.2 ppts. And wage growth remained elevated at 4.0% year-over-year for permanent workers.   

The monthly labour market data is still notoriously volatile, but the drop in the November unemployment rate is also broadly consistent with job openings data (indeed.com) showing hiring demand in Canada has begun to recover. 

The Bank of Canada was already unlikely to cut interest rates further at next week’s policy decision given higher Q3 GDP, better than expected labour market data over September and October, and core inflation that is still running above the central bank’s 2% target. The November labour market data likely cements that decision, and also is consistent with our base-case that the BoC will not need to reduce interest rates again through next year.

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The November details

• The 54k jump in the (notoriously volatile) employment count added to the 127k cumulative increase over September and October. 

• Over the last year, employment is up 309k as of November, 137k in full-time jobs and 173k in part-time. 

• The unemployment rate dropped to 6.5% from 6.9% in October, and was below year-ago levels for the first time since April 2023. 

• The youth (15-24 year old) unemployment rate is still high (12.8% in November) but fell 1.3 percentage points from October. The typically less volatile 25-54 year-old unemployment rate edged down to 5.6% from 5.8%  in October.

• Heavily trade exposed sectors continue to underperform — manufacturing employment edged down 9k in November and transportation & warehousing employment was up just 4k. But both sectors still posted year-over-year increases. Most of the November employment increase came from a 46k jump in health care and social assistance employment.

• A 26k drop in the labour force in November was largely due to a decline in the labour force participation rate, but slower population growth also means that fewer employment gains over time will be needed to push the unemployment rate lower. 

• Employment growth also looked strong in 2023 and 2024, but it wasn’t fast enough to keep up with a surge in available workers and the unemployment rate still rose steadily.  The 18k increase in the 15+ population count in November, by comparison, was the lowest since May 2021 — that pace will continue to slow in months ahead (the break-even rate of employment growth that would prevent a rise in the unemployment rate will likely be slightly negative in 2026).

• Regionally, the decline in the November unemployment rate was fairly broad-based, with several provinces, including Alberta, Ontario, British Columbia, Quebec, and others posting declines. Alberta’s unemployment rate fell to 6.5% – the lowest since March last year. Ontario’s unemployment rate marked a second consecutive decline to 7.3%.

• Hours worked bounced back 0.4% in November reflecting both the employment gain as well as the end of labour disruptions that lowered October hours worked in Alberta.

• And wage growth remained elevated at 3.6% year-over-year for all workers, and 4.0% year-over-year for permanent workers. 

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About the Author

Nathan Janzen is an Assistant Chief Economist, leading the macroeconomic analysis group. His focus is on analysis and forecasting macroeconomic developments in Canada and the United States.

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