Following four consecutive months of job gains, Canadian employment increased by 11,000 (or 0.1%) in November. Economists had expected hiring to decline by 15,000 according to the Bloomberg News survey. All of the rise in employment, however, was in part-time jobs, as full-time hiring fell by 8,700. This pattern is particularly worrisome as over the past 12 months, all of the net rise in employment has been in part-time work. Nationwide, part-time work has grown by 6.4% and full-time has fallen by 0.2% year-over-year.
The jobless rate fell unexpectedly by 0.2 percentage points to 6.8% as fewer people were looking for work. This is the first time the unemployment rate has fallen in five months.
The fourth straight monthly jobs gain is another boost to an economy healing from a collapse in commodity prices and business investment. Output growth rebounded to a 3.5% pace in the third quarter, and Governor Stephen Poloz said Monday he would only cut his 0.5% benchmark interest rate if there was another shock. His next rate decision is Wednesday.
The November jobs report highlighted the continued weakness in the oil sector. Unemployment in Alberta surged to its highest level in more than two decades to 9.0%, and in the manufacturing region of Quebec, it fell to a record low 6.2%; however, most of the rise in discouraged workers was in Quebec where the labour force dropped by 20,300, the largest drop since December 2014.
Service companies hired 31,200 workers, with almost half of those in the financial services and real estate sector. Goods producers cut back by 20,600, as manufacturing jobs dropped by 11,900 and construction fell 14,400.
The number of hours worked rose 1.1% in November from a year earlier. Average hourly wages of permanent employees grew 1.5% from a year earlier, slower than the 1.8% pace in October.
Clearly, the Bank of Canada will remain on the sidelines next week. Despite stable monetary policy in Canada, however, mortgage rates are rising reflective of the rise in market yields since President-elect Trump won the US election. Some mortgage rates in Canada are priced off of the 5-year government of Canada bond yield, which has risen more than 30 basis points since the election.