OTTAWA (Reuters) – Canada's unemployment rate rose more than expected to 6.8% in November, the highest figure in nearly eight years without the pandemic, as the economy added 50,500 jobs, data showed on Friday, likely boosting job opportunities. in the works. The main interest rate was lowered next week.
Analysts polled by Reuters had forecast a gain of 25,000 jobs in November and the unemployment rate to rise to 6.6% from 6.5% in October.
A jump in unemployment could push Canada's central bank to lower borrowing costs by 50 basis points for the second time in a row at the bank's rate announcement on Wednesday.
The unemployment rate has risen by 1.7 per cent since April 2023 and is now the highest since January 2017, excluding the years of the coronavirus pandemic, Statistics Canada data showed.
The increase in the unemployment rate was caused by an increase in people looking for work, the agency said in the last major economic data report to be released before the Bank of Canada (BoC) interest rate announcement.
Canadian workers grew by 137,800, more than double the job gain, the data said.
Adding to signs of labor market weakness, average hourly wage growth for full-time workers slowed to an annual rate of 3.9% from 4.9% in October. The expected wage growth rate has been slow from an average of 3.9% in June 2023.
The BoC cut its key policy rate by 125 basis points from June to 3.75%, and ahead of Friday's jobs report, financial markets saw about a 50% chance of a major cut next week. A cut of 25 points is the absolute value.
Among other big data released since the BoC's last rate cut on October 29, inflation remains within the bank's control zone, while the economy is recording a sharp slowdown in quarterly growth.
Job gains in November were in full-time employment more than offsetting a slight decline in part-time employment.
Overall, employment in the goods sector fell by 20,800 jobs, mostly in manufacturing, while the services sector gained 71,500 jobs, led by wholesale and retail trade.
The employment rate, or the share of people employed, remained at 60.6% in November after falling for six consecutive months, as job growth kept pace with population growth, Statscan said.
(Reporting by Ismail Shakil in Ottawa; Editing by Dale Smith)
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