The country’s economy added 25,000 new jobs in November, according to the latest Statistics Canada report.
At the same time, the unemployment rate rose slightly to 5.8 percent, even with the slight increase in job numbers.
The country’s unemployment rate has now risen 0.8 percentage points since April, even as the economy has added jobs. However, more people were looking for work as well.
More jobs in manufacturing and construction
Most of the job gains were full-time, totalling just about 60,000 such positions for November. There was a loss of more than 34,000 part-time jobs.
The manufacturing sector saw a gain of 28,000 jobs, while construction added 16,000 to the job market.
At the same time, the wholesale and retail trade industry saw 27,000 jobs disappear. The finance, insurance, real estate, rental and leasing sectors lost 18,000.
November job losses hit young people (15 to 24) hardest – and also those nearing the normal retirement age (55 to 64).
Jobs in the public sector dropped by 28,000, and there were significant losses in both educational services (50,000) and construction (28,000).
However, many companies are having trouble attracting workers. For example, hospitality employers were looking for more than 170,000 positions as of June.
Unemployment rate may rise slightly
“With the population … growing by 78,000 and the labour force increasing by 36,000, labour demand didn’t keep up with labour supply,” he said.
Scotiabank’s Derek Holt is “guesstimating” that December’s jobless numbers, which are being released on in January, will show a gain of 25,000 jobs and a “slight uptick in the unemployment rate as the pace of labour force expansion through population growth is likely to continue to exceed job growth.”
Canadian job market resilient
According to the economists interviewed by The Star, the consensus is that the job market has proven “surprisingly resilient,” despite the economy slowing under the strain of numerous interest rate hikes by the Bank of Canada over the past two years.
One reason behind this, economists say, is that Canadian firms are practising labour hoarding: maintaining head counts, while scaling back hiring and layoffs, as they try to make do with what they have during the economic downturn.
Holt believes the private sector will follow this strategy into 2024.
Population growth sets new record
Holt, who is the VP and Head of Capital Markets Economics at Scotiabank, also points out that “vacancies remain high and immigration is explosively above reasonable levels in relation to the ability of the country to absorb so much so quickly, but at the margin, the two forces should continue to support employment levels.”
In November, Immigration Minister Marc Miller announced that Canada will stick to its plan to welcome 485,000 permanent residents in 2024 and 500,000 in 2025.
Population growth for the first nine months of 2023 was the largest recorded, totalling 1,030,378 people, according to Statistics Canada. This includes 2022’s record-high growth.
It is a banner year for job growth
So far this year, 430,000 jobs have been created, with December’s numbers still to come.
Scotiabank’s Holt describes 2023 as “another banner year for job growth in Canada despite the cloud of doom that has hung over so much of the commentary from others.”
Most of them (approximately 350,000), says Holt, have been full-time jobs. Most of those full-time jobs (290,000) have been private payroll jobs. Public payroll employment rose by about 144,000, and self-employment changed little.
Still, the reality is that the job market has cooled this year as high-interest rates continue to impact the economy.
Interest rates are forecast to remain elevated through at least the first half of 2024.
Interest rate hike paused for now
The Bank of Canada paused its benchmark interest rate at 5 percent in December. The bank has been looking for softening in the labour market as it ponders the forecast for inflation and what to do with its benchmark interest rate in January.
Heading into 2024, Canada’s new Immigration Levels Plan 2024-26 lists the guidelines for the number of permanent residents invited to Canada in the next three years under the three immigration classes: economic, family, and humanitarian.
Over the next year, the government will also assess the number of temporary resident admissions – including international students and temporary foreign workers – to ensure this part of the immigration system is sustainable.
Canada has also welcomed a record number of international students, and those numbers are continuing to rise.
Steve Tustin is the Content Editor for Rentals for Newcomers and contributing editor for Prepare for Canada. He is the former managing editor of Storeys.com and a former senior editor at both the Globe and Mail and the Toronto Star.
*No AI-generated content was used in the writing of this story, and all sources are cited and credited where possible.
© Prepare for Canada 2023