Canada’s November Labour Force Survey showed a third consecutive upside surprise, with the economy adding 53,600 jobs and pushing the unemployment rate down to 6.5%, the lowest since July 2024 and a sizable drop from 6.9% in October. The move marks the most significant monthly decline in the unemployment rate since 2022 and came despite ongoing US tariffs that have otherwise weighed on activity.
Forecasters had expected a mild deterioration rather than a surge in hiring. Economists surveyed by Bloomberg were expecting a 2,500 decline in employment and an increase in the unemployment rate to 7%, making the actual print a substantial positive surprise relative to consensus.
Job creation was concentrated in part-time positions and the private sector, with health care and social assistance accounting for 46,000 of the gains. November capped a three‑month run in which employment has risen by 180,000 since September, the strongest three‑month stretch in about a year and more than enough to reverse the job losses recorded over the summer.
Youth hiring led the latest gains, with employment growth heavily concentrated among those aged 15 to 24. That strength pulled the youth unemployment rate down to 12.8%, from a peak of 14.7% earlier this year, underscoring improved conditions for younger workers even as broader cyclical headwinds persist.
Part of the decline in the aggregate unemployment rate reflects a smaller labour pool. The labour force fell by 25,700 in November, pushing the participation rate down to 65.1%. Prime Minister Mark Carney’s government has kept in place the post‑pandemic immigration curbs introduced by his predecessor, limiting population growth and thereby dampening labour supply.
Other labour market indicators continue to point to steady, but not overheating, wage pressure. Average hourly wages rose 3.6% year‑over‑year in November (an increase of 1.27 dollars to 37.00 dollars), following 3.5% growth in October on a not‑seasonally‑adjusted basis.
Labour market flows also look firmer than a year ago, though still softer than in the late 2010s expansion. November’s headline employment gain came entirely from part-time positions, which rose by 63,000 (1.6%) on the month and 2.7% over the past three months, compared with a 0.5% increase in full‑time jobs. Involuntary part‑time work accounted for 17.9% of all part‑time positions, roughly in line with last year and slightly below the 2017–2019 average of 19.3%.
The November labour data landed alongside a better‑than‑expected GDP print, underscoring a near‑term resilience that masks underlying fragilities. Output grew at a 2.6% annualized pace in the third quarter, well ahead of economists’ forecasts, but the composition was less encouraging: final domestic demand slipped 0.1%, household consumption fell 0.4%, and business investment was flat. Those details reinforce the view that US tariffs are destabilizing key strategic sectors, even as headline growth remains positive.
Financial markets reacted quickly to the combination of strong jobs and firmer growth. The report lifted the Canadian dollar and pushed market rates higher, leading investors to further scale back expectations of additional easing from the Bank of Canada. Pricing in overnight swaps now leans toward a gradual tightening path instead, with markets embedding roughly a 25‑basis‑point hike by December 2026.