Canada's unemployment rate shrinks to lowest in 16 months

OTTAWA- Canada's unemployment rate once again defied expectations and fell to a 16-month low in November as a solid gain in part-time jobs boosted the number of people employed for the third time in a row, data showed on Friday.

The unemployment rate fell 0.4 percentage points in November to 6.5%, the lowest since July 2024, Statistics Canada said, adding it was led by 53,600 net job gains in November mainly among youth.

The job gains were driven by a 63,000 net additions in part-time workforce linked to healthcare and social assistance sector, StatsCan said.

With three months in a row of job gains, the Canadian economy has now added 181,000 new jobs since September, offsetting an almost no change in jobs for the first eight months when U.S. tariffs and trade uncertainty choked hiring.

Analysts polled by Reuters had forecast employment to reduce by 5,000 jobs in November and the jobless rate to tick up to 7%.

The improvement in unemployment rate was also helped by a reduction in total labor force as immigration curbs instituted by the government sent less people into the job market.

YOUTH EMPLOYMENT IMPROVES

Canada's unemployment rate had been steadily climbing since March when President Trump unleashed a raft of tariffs on critical sectors such as steel, aluminum, cars and every other industry that did not comply with a free trade deal.

The impact has been more acute among the youth, or those aged between 15 and 24 years.

But November and October were the outlier. Employment in this category was up by 50,000 in November, and with October, these were the first jumps in youth employment since the start of the year, StatsCan said.

The youth unemployment rate fell 1.3 percentage points to 12.8% in November, following a slight decline in October. In September the youth unemployment rate had peaked at a 15-year high.

Employment among the core-aged group, which account for two-thirds of the total labor force, was little changed in November.

The average hourly wage of permanent employees - a gauge closely tracked by the Bank of Canada to ascertain inflationary trends - stayed at 4% in November, same as the previous month.

Promit Mukherjee/Reuters