TORONTO ― Canada’s jobless rate jumped to its highest level in a year-and-a-half in November as the economy lost 71,000 jobs, Statistics Canada reported Friday.
The job losses were concentrated in Quebec, Alberta and British Columbia, with employment “little changed” in other provinces, the statistical agency said. The increase in the jobless rate, from 5.5 per cent to 5.9 per cent, is the largest since 2009, during the financial crisis.
That came as a surprise to analysts, who had largely been expecting moderate job growth for November.
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“Canada’s labour market took more than a breather in November, with an apparent massive decline in employment,” CIBC economist Royce Mendes wrote in a client note.
Mendes said the Bank of Canada would likely “re-think” its reluctance to lower interest rates if this became a trend.
Quebec saw employment drop by 45,000, with losses concentrated in manufacturing, accommodation and food services. Alberta and British Columbia lost 18,000 jobs each, with losses concentrated in retail and wholesale in Alberta, and spread across a number of industries in B.C.
Ontario was the only province to see significant job growth, up 15,000 net positions on the month.
Thanks to strength earlier this year, Canada’s job market continues to look strong, having added 293,000 net new jobs over the past 12 months, most of them full-time roles. That’s an increase of 1.6 per cent.
Royal Bank of Canada senior economist Nathan Janzen noted that a large chunk of the job losses were in public administration, suggesting some of it was related to hiring for the election in October.
“The monthly employment data is highly volatile so it will take more reports like this one to really change the narrative that Canadian labour markets have been looking relatively resilient,” he wrote in a client note.
“And a much stronger November employment report out of the U.S. could calm some concerns about go-forward external demand for Canada.”
The U.S. Bureau of Labor Statistics reported Friday that the country added 266,000 jobs in November, and the jobless rate declined by a notch, to 3.5 per cent.
Slower hiring ahead
Looking further out, Canada’s job market seems unlikely to bounce back quickly. A new survey from human resources firm Hays, released Friday, found only 40 per cent of Canadian employers plan to hire in the next year ― down from 52 per cent in the prior year’s survey.
“Hiring activity is expected to slow as employers opt to do more with less resources,” Hays said in its report ― and that, in turn, could put more pressure on employees.
Not hiring at a time of skilled labour shortages “could worsen workplace stress, morale and efficiency,” the HR firm warned.