By Robb M. Stewart
OTTAWA--Unemployment in Canada spiked in November even with a strong pickup in hiring, reflecting in part the continued growth in the workforce thanks to the surge in population.
Canadian employers added 50,500 jobs last month, Statistics Canada reported Friday. That was slightly more than double the rise in employment economists were expecting.
Still, the jobless rate climbed 0.3 percentage point to 6.8%, the highest since mid-2021, or since the start of 2017 if the peak pandemic years are excluded.
When calculated using U.S. Labor Department methodology, Canada's unemployment rate was similar 0.3 point higher at 5.9%.
The number of Canadians looking for work or on temporary layoff in November jumped by 6.1%, bring the number of unemployed to 1.52 million. The unemployment rate has headed higher since April 2023, rising 1.7 percentage points in that time.
The recovery in job growth, with the strongest pace of hiring since April, but rise in the number of jobless offers another mixed signal for the Bank of Canada ahead of next week's policy decision. Ahead of the labor force data, economists at the country's largest banks were roughly split between expectations the central bank will again cut rates by an outside half percentage point and those looking for a smaller quarter-point move.
Statistics Canada's data showed that nearly half of the people who were unemployed in November hadn't worked in the last year or had never worked, up from just under 40% a year earlier. In comparison, the share of unemployed Canadians who lost their job and the share who voluntarily left their previous job were both down on last year.
Labor force participation, the proportion of the working-age population employed or looking for work increased 0.3 point to 65.1% in the latest month, which offset the cumulative decline in the previous two months.
Immigration in recent years has swelled Canada's population and the workforce in the country. The labor force in November surged by 137,800, greatly outpacing the rise in employment, and as risen by 605,000 on an annual basis.
The recovery in job growth after just 14,500 jobs were added to the economy the month before follows a recent pickup in monthly hiring intentions and improvement in business sentiment in the wake of four successive interest rate cuts by the Bank of Canada since June, including the larger-than-usual half point move at the last policy meeting in October.
With inflation back at the central bank's 2% target, albeit after a slight acceleration in October, and economic growth cooling in the third quarter but after upward revisions to the expansion in past quarters, the Bank of Canada is expected to cut rates again on Dec. 11
Statistics Canada's survey showed all of the jobs added in September were for a second month running in full-time employment, which a rise of 54,200 from the month before. Part-time employment fell by 3,600 for the month.
Job gains were recorded across a number of industries, including wholesale and retail, construction and professional, scientific and technical services.
The ranks of public-sector employees were up strongly, and increased only modestly in the private sector. The number of self-employed Canadians dipped slightly, the agency said.
Wage growth continues to outpace inflation but has slowed sharply in recent months. Average hourly wages for permanent employees was up 3.9% in November from a year earlier, much softer than the 4.7% advance economists anticipated and a percentage point lower than in October.
Total hours worked was little changed on-month, edging down 0.2%, and were up 1.9% compared with a year earlier.
Write to Robb M. Stewart robb.stewart@wsj.com
(END) Dow Jones Newswires
12-06-24 0858ET
