Canada witnessed a decrease in its unemployment rate to 6.5% in November, hitting a 16-month low as per Statistics Canada’s recent release. This decline, from October’s 6.9%, marks a shift after a year of upward trends, peaking at 7.1% in September, the highest since May 2016 excluding COVID-19 years.
Economists suggest that the possibility of an interest rate cut at the year-end is now less likely due to this positive development. Douglas Porter, BMO’s chief economist, highlighted that such a substantial drop in the unemployment rate within a two-month period has not been seen since the tech boom in 1999, excluding exceptional circumstances like the COVID-19 era.
The reduced pressure on the jobless rate can be attributed to a slowdown in population growth and the labor force, with a decline in the number of individuals actively participating in the workforce during November. Additionally, the economy unexpectedly added 54,000 jobs last month, predominantly part-time positions, marking the third consecutive monthly increase.
The private sector drove most of the job growth, particularly benefiting young individuals aged 15 to 24, who faced challenges in the job market throughout 2025. While this age group still experiences a relatively high unemployment rate of 12.8%, the recent decline is viewed positively by analysts like Brendon Bernard from Indeed Canada.
Various sectors contributed to the employment growth, with notable gains in health care, social assistance, accommodation, and food services, as well as natural resources. Conversely, job losses were observed in wholesale and retail trade, offsetting the previous month’s industry upswing.
Alberta led in job creation by adding 29,000 positions last month, followed by New Brunswick and Manitoba, each seeing a rise in employment numbers. Hourly wages on an annual basis increased by 3.6% to $37.00, reflecting positive momentum in the labor market.
The robust job report aligns with recent positive economic indicators in Canada, such as the Q3 GDP performance and strong job gains. Analysts like Nathan Janzen from RBC believe that with inflation slightly above target and the recent economic data, there is little chance of an immediate rate cut by the Bank of Canada.
The next interest rate announcement by the Bank of Canada is scheduled for Wednesday, with analysts leaning towards the view that no rate cuts are expected in the near future.