Canada's unemployment rate climbed to 6.8% in November 2023, reaching its highest level in nearly eight years outside of the pandemic period, according to data released by Statistics Canada on Friday. The increase came despite the economy adding 50,500 new jobs, surpassing analysts' expectations.
The unemployment rate rose from 6.5% in October, marking a 1.7 percentage point increase since April 2023. The surge in joblessness was primarily driven by more Canadians actively seeking employment, with the labor force expanding by 137,800 people - more than double the number of jobs created.
Employment gains were concentrated in full-time positions, which offset minor losses in part-time work. The services sector led job creation with 71,500 new positions, particularly in wholesale and retail trade. However, the goods sector shed 20,800 jobs, with manufacturing taking the biggest hit.
Wage growth showed signs of cooling, as permanent employees' average hourly earnings increased by 3.9% annually in November, down from 4.9% in October. This represents the slowest wage growth rate since June 2023.
The employment rate held steady at 60.6% after six consecutive monthly declines, as job growth kept pace with population increases.
The latest employment figures may influence the Bank of Canada's upcoming interest rate decision on December 11. Market observers have increased their bets on a larger-than-usual rate cut, with a 68% probability of a 50-basis-point reduction.
Windsor, Ontario continues to face the highest regional unemployment at 8.7%, despite a slight improvement from 8.8% in October.
The Canadian dollar showed resilience following the report, strengthening slightly to 71.16 U.S. cents, while government bond yields declined.
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