Region’s jobless rate edges up to 4.5% in November, labour market still hot, Statistics Canada says

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Ottawa-Gatineau employers added nearly 5,000 jobs to their payrolls in November, but the region’s unemployment rate still edged up as the number of people looking for work also increased, Statistics Canada says.

The unemployment rate rose to 4.5 per cent in November, up from 4.2 per cent the previous month, the federal agency said in its latest labour force survey released Friday.

Total employment in the region grew by 4,800 jobs last month to 802,500 on the strength of gains in the retail, warehousing and food and accommodation sectors as the holiday season approaches. 

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But the labour force – which includes people who are actively seeking work – swelled even more, rising by 6,800 to a total of 839,900.

Meanwhile, the participation rate – which compares the size of the region’s labour force to the region’s population of working-age residents – increased to 67.5 per cent, up from 67.1 per cent in October.

The retail industry posted some of the most robust job gains in November, with the three-month rolling average rising by 3,100 positions. Educational services also added 3,100, while the construction industry gained 2,200 jobs, transportation and warehousing added 2,000 and accommodation and food services grew by 1,000.

Meanwhile, health care shed 2,900 jobs, professional, scientific and technical services was down a net 2,400, information, culture and recreation lost 2,500 positions and business, building and other support services shrank by 2,000 jobs.

Nationally, employment was little changed in November as the economy added a modest 10,000 jobs.

Statistics Canada said the country’s unemployment rate was 5.1 per cent last month, down from 5.2 per cent in October.

“The main overriding feature of today’s report was that you were continuing to gain jobs in Canada,” TD’s director of economics James Orlando said Friday.

“If you add up just the number of jobs gained in November and October, it’s pretty substantial.”

In October, the economy added a whopping 108,000 jobs, taking forecasters by surprise with the strong jobs gain.

Employment rose in several industries in November, including finance, insurance, real estate, rental and leasing, manufacturing and in information, culture and recreation, while it fell in construction as well as wholesale and retail trade.

Statistics Canada also noted in its report that the employment rate among core-aged women aged 25 to 54 hit 81.6 per cent in November, a record high in comparable data going back to 1976.

Canada’s labour market has remained remarkably strong despite signs of an economic slowdown. The unemployment rate fell to a record low of 4.9 per cent in the summer and has edged up only slightly since then.

“The economy is clearly still doing very well. When you look at the labour market, you have not seen a slowdown,” Orlando said.

In November, wages were up 5.6 per cent compared to a year ago, marking the sixth consecutive month of above five per cent growth. However, wage growth continues to lag inflation. In October, the annual inflation rate was 6.9 per cent.

Bank of Canada governor Tiff Macklem has characterized Canada’s low unemployment rate as unsustainable and said it’s contributing to high inflation.

The central bank is hoping to see the labour market ease in response to its aggressive interest rate hikes this year.

Recent research from the Bank of Canada suggests it believes it can bring inflation down without causing a large increase in unemployment.

The central bank began raising interest rates in March, when it delivered the first of six consecutive rate hikes, and is expected to deliver another interest rate increase next week.

As the Bank of Canada nears the end of the rate-hiking cycle, markets will be watching out for any indication next week on whether to expect another rate hike in January.

Orlando said the job report Friday supports the forecast of a half-percentage point rate hike next week, with the door open to another rate hike in January.

“I don’t think by January you’re going to have enough data to convince you that the economy has turned enough,” he said.

“So you probably will likely see the policy rate getting into about 4.5 per cent in early 2023.”

– With additional reporting from the Canadian Press

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