By Promit Mukherjee
OTTAWA, Dec 5 (Reuters) – Canada’s unemployment rate once again defied expectations and fell to a 16-month low in November as a solid gain in part-time jobs boosted the number of people employed for the third time in a row, data showed on Friday.
With three months of job gains, the Canadian economy has now added 181,000 new jobs since September, in contrast to almost no change in the first eight months of the year when U.S. tariffs and trade uncertainty choked hiring.
The unemployment rate fell 0.4 percentage points in November to 6.5%, the lowest since July 2024, Statistics Canada said, adding it was led by 53,600 net job gains in November mainly among youth.
A 63,000 net addition in the part-time workforce linked to the healthcare and social assistance sector drove the lower unemployment, StatsCan said.
Analysts polled by Reuters had forecast employment to decrease by 5,000 jobs in November and the jobless rate to tick up to 7%.
A reduction in the total labor force as immigration curbs instituted by the government sent fewer people into the job market also helped.
“The real eye-popper in today’s report is the massive 4-tick drop in the jobless rate to 6.5%, following a 2-tick drop the prior month,” said Doug Porter, chief economist with BMO Capital Markets.
He noted that the last time outside of the pandemic such a drop in unemployment came over two months was during the tech boom of 1999.
YOUTH EMPLOYMENT IMPROVES
Canada’s unemployment rate had been steadily climbing since March when President Donald Trump unleashed a raft of tariffs on critical sectors such as steel, aluminum, cars and every other industry that did not comply with a free trade deal.
The impact has been more acute among the youth, or those aged between 15 and 24 years.
But November and October marked the first jumps in youth employment since the start of the year, StatsCan said.
The youth unemployment rate fell 1.3 percentage points to 12.8% in November, following a slight decline in October. In September the youth unemployment rate had peaked at a 15-year high.
Employment among the core-aged group, which accounts for two-thirds of the total labor force, was little changed in November.
The average hourly wage of permanent employees – a gauge closely tracked by the Bank of Canada to ascertain inflationary trends – stayed at 4% in November, the same as the previous month.
The labor force data is the last major data set to come before the Bank of Canada’s monetary policy decision next week. Money markets are seeing an almost 93% chance of a hold, and Friday’s numbers are likely to further bolster the expectations.
The Canadian dollar gained after the data and was trading up 0.37% to 1.3904 to the U.S. dollar or 71.92 U.S. cents.
“There really wasn’t much doubt that the Bank was on hold next week, but the series of good employment gains, and—maybe more importantly—the sudden pullback in the unemployment rate seriously reduces the odds of any further cuts in 2026,” Porter from BMO Capital Markets said.
(Reporting by Promit Mukherjee; Editing by Dale Smith and Chizu Nomiyama)
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