Canada gains 25,000 jobs but unemployment rate rises

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Canada added a modest 25,000 jobs in November, but the unemployment rate ticked up to 5.8 per cent from 5.7 per cent the month prior as the labour market showed signs it continues to deteriorate.

The latest labour force survey, released Dec. 1 by Statistics Canada, blamed inflation for the increase in unemployment, as the higher cost of essential goods and services continues to put Canadian households and businesses under strain. While the 25,000 jobs increase was a positive, it failed to keep up with the increase in Canada’s population, so overall the number of unemployed Canadians continued to grow.

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The survey also found that fewer Canadians are leaving their jobs of their own free will. Among the unemployed in November, nearly 68 per cent had been laid off, compared to around 63 per cent the same time last year.

Unemployment has now risen by 0.8 percentage points since April. That kind of change normally signals a recession, wrote Benjamin Reitzes, a strategist at BMO Economics. For now, though, he said Canada’s economy is “hanging in.”

The numbers come just days before the Bank of Canada is set to make its next interest rate decision. With the country’s GDP contracting, it appears the central bank’s rate hikes have been successful in cooling the economy, according to an analysis from TD Bank Economics. TD anticipates the central bank will start cutting interest rates in the spring of next year.

While unemployment is up among all age groups, youth and new immigrants are among the hardest hit. The youth unemployment rate reached 11.6 per cent in November, compared to 11.4 per cent in the previous month. New arrivals to Canada continue to have issues finding work related to their foreign degrees and work experience, because they lack Canadian experience, references, and connections within the job market.

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In this difficult economic environment, construction work seems to be the place to be; employment in the sector was up in both October and November. The economy also added jobs in manufacturing last month, but lost jobs in the wholesale-retail trade, as well as finance, insurance and real estate. This might be due in part to recent job cuts by the big banks, wrote Stephen Brown, deputy chief North America economist at Capital Economics.

There was a 37,700 jump in private sector employees, which offset a drop in self-employment. Services employment declined by 13,000.

Employment increased in New Brunswick but declined in Prince Edward Island. The rest of the provinces were mainly unchanged. The unemployment rate was highest in the St. Catharines-Niagara region and Oshawa in Ontario.

• Email: mcoulton@postmedia.com

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