The Canadian economy added 10,100 jobs in November, easing some of the concerns over an overheating labor market after a blockbuster October jobs report. The data might prove that October’s robust job gains was an aberration.
Still, the implications regarding the central bank’s fight against inflation were not much of a relief.
The unemployment rate dropped by 0.1 percentage point to 5.1% as 13,700 workers exited the labor force on the month, according to data released by Statistics Canada on Friday. The unemployment rate continued to hover near an all-time low.
As a result, the labor force participation rate fell by 0.1 percentage point to 64.8%, remaining more than half of a percentage point lower than the pre-pandemic level.
Most of the gains in November’s jobs report were from full-time workers, adding 50,700 new jobs, while part-time jobs were down by 40,600 on the month.
The divergence kept wage growth elevated in November as full-time workers often demand higher wages, adding more to inflation concerns.
The mixed report should keep the Bank of Canada on high alert, but we don’t think that it was enough for the central bank to move away from a 25 basis-point interest rate increase in December.
Underneath the headline, most of the new jobs came from the services sector at 19,600 positions while the goods sector lost 9,400 jobs. Construction lost 24,700 jobs after adding roughly the same number in the prior month. Trade services continued to post net job losses at 23,200 on the month.