Data released by Statistics Canada on Friday showed further signs of a slowing labour market in Canada. Canada’s labour market weakened in 2024, which contributed to the Bank of Canada’s (BoC) four rate cuts since June. The BoC is hoping lower interest rates will help reignite consumer demand, which could result in businesses raising staff levels to meet the increased demand.

• Canada’s unemployment rate rose to 6.8% in November from 6.5% in the previous month. This marked Canada’s highest unemployment rate since September 2021. The number of unemployed persons in Canada’s economy increased.
• Canada’s economy did add 50,500 jobs in November. This exceeded the 25,000 jobs economists had expected, based on a Bloomberg survey. Strong job gains were seen in the retail trade and food services industries. The economy added full-time jobs, while the part-time sector lost jobs over the month.
• Despite November’s job additions, they continued to fall short of the pace of immigration growth. The participation rate increased to 65.1%. This helped push the unemployment rate higher and reinforced expectations for another rate cut from the BoC this month.
• The US also released its labour market data for November, which showed much the same. The US unemployment rate rose to 4.2% in November from 4.1% in October.

The BoC makes its next interest-rate announcement on Wednesday. Soft labour market data reinforced bets for another rate cut, potentially a jumbo 50-basis-point rate cut. A slower labour market has weighed on economic conditions, particularly consumer activity. The BoC hopes its rate cuts will help support consumer and business activity. South of the border, the US Federal Reserve Board makes its interest-rate announcement on December 18, where it is currently expected to lower interest rates again.

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