By Robb M. Stewart
OTTAWA--Job gains in Canada were muted in November even as the unemployment rate eased slightly back toward the record low level of the summer, surprise resilience that supports the central bank view there is excess demand in the economy.
The number of employed working-aged people in Canada rose by 10,100 in November from October, while the jobless rate slipped to 5.1%, edging toward the 4.9% low seen in June and July, Statistics Canada reported Friday. Market expectations were for a 10,000 rise in jobs and an unemployment rate of 5.2%, according to TD Securities.
When calculated using U.S. Labor Department methodology, Canada's unemployment rate in November slipped 0.1 percentage point on-month to 4.0%.
The country's central bank has signaled the labor market needs to weaken to help cool inflationary pressures. November's jobs figures are one of the last major data releases before the Bank of Canada's next policy decision on Wednesday, which most economists expect will result in a seventh straight increase in the policy rate in an effort to tame a stubbornly high inflation rate.
Across industries, the employment picture in November was mixed, though gains were logged in full-time work that more than offset weakness in part-time roles.
Growth in average hourly wages held steady for the month, with growth remaining above 5% for a sixth consecutive month with a rise of 5.6% over November last year, the data agency said.
Bank of Canada Gov. Tiff Macklem has indicated interest rates likely will rise further, though with the policy rate having been lifted 3.5 percentage points this year to bring it to 3.75%, the cycle may be nearing an end.
Higher interest rates have begun to weigh on some corners of Canada's economy, most noticeably on housing, and the central bank has forecast the economic is set to stall toward the end of the year. Canada's economy grew more strongly than expected in the three months through September, though the growth was driven by exports and business inventory building that more than offset a decline in consumer spending, and Statistics Canada's advance estimate for October suggested the economy was essentially unchanged from the month before.
Friday's jobs report showed a strong gain in full-time employment in November, up by 51,000 positions from the month before, while part-time jobs shrank, falling by 40,600.
The country's adjusted unemployment rate, which includes people who wanted a job but didn't look for one, was largely unchanged at 7.0%, and the participation rate dipped 0.1 percentage point to 64.8%, near the level it has hovered at since July.
Offsetting employment across industries for November saw gains in sectors including finance, insurance, rental and leasing, and manufacturing, but falls in several areas including construction and wholesale and retail trade.
Employment in the core working ages between 25 to 54 years old was up 0.3% from October, a third straight monthly increase, with most of the advance in core-aged women.
There was little change in total hours worked, which were up 1.8% from 12 months earlier.
With the dip in unemployment in November, the labor-force participation rate--the proportion of the working-age population who were either employed or unemployed--fell 0.1 percentage point from October to 64.8%. Participation has hovered around the same level since July, and November's rate was 0.6 percentage point below the most recent high of 65.4% reached in February and March.
The report indicated the ranks of the self-employed were little changed in November, similar to recent months and after a slight upward trend between October 2021 and last May. The number of private-sector and public-sector employees were both also little changed for the month, the agency said.
Mr. Macklem has in recent months said that Canada's unemployment rate isn't sustainable for the economy and has to climb to help contain stubbornly high inflation. In its last rate-policy decision in October, the central bank said it expected economic growth to stall over the next three quarters into mid-2023, as the impact of tighter money works its way through the broader economy. Private-sector economists forecast a recession is likely early next year as Canadians scale back their spending due to inflation and higher debt-servicing costs.
Write to Robb M. Stewart robb.stewart@wsj.com
(END) Dow Jones Newswires
12-02-22 0910ET
