Question Period Note: Labour Force Survey – November 2024

• Employment grew by 50,500 in November, above market expectations (+25,000).

• The unemployment rate jumped to 6.8%, while markets had expected a rise to 6.6%. The labour force participation rate correspondingly rose to 65.1% (+0.3 p.p.).

• Employment rose by 50,500 jobs in November, while the unemployment rate rose to 6.8 per cent.

• The labour market has been gradually easing, though the Canadian economy has still added 329,000 jobs over the past year.

• And over 1.4 million more Canadians are employed today than before the pandemic.

• The labour force participation rate for women in their prime working years remains high.

• Wage growth has outpaced inflation for the past 21 months.

• Budget 2024 makes investments in workers’ skills to grow Canada’s economy, create good-paying jobs, and tackle Canada’s investment and productivity challenges.

• Bottom Line: A mixed report. Headline employment growth was strong, and the employment rate held steady, as the rise in the unemployment rate reflected a large increase in labour force participation. Job gains were entirely in full-time work, though total hours worked fell due to strikes. The industry details were less positive, with private sector paid employment only rising by 6,000 while public sector paid employment rose by 45,000. Wage growth also fell significantly after increasing last month.

• Key Labour Market Indicators: Employment is 7.4% above pre-pandemic levels, and despite cooling in the labour market, 329,000 jobs have been created over the past year. While the unemployment jumped to 6.8% in November, this reflected a rise in the participation rate (+0.3 p.p. to 65.1%). The employment rate held steady at 60.6%. The unemployment rate is now 2.0 p.p. above post-pandemic lows, and up 1.0 p.p. from a year ago. Using U.S. concepts, the unemployment rate rose to 5.9%, well above the U.S. rate (4.2%).

• Full-Time Jobs and Hours Worked: Canada gained 54,000 full-time jobs and lost 3,500 part-time jobs. Despite this, total hours worked fell by 0.2% as labour disruptions at the Vancouver and Montreal ports, as well as the postal workers strike, all occurred at least partly during the LFS reference week. The share of workers with a full-time job rose to 82.0% (+0.1 p.p.) and remains above the 2019 average (81.0%).

• Industries: Employment in goods-producing industries fell by 20,800, as a large decrease in manufacturing was only partly offset by a gain in construction. Services employment jumped by 71,500 on relatively broad-based gains, though wholesale and retail (+38,700) did the heavy lifting. Private sector paid employment (+6,300) and self-employment (-700) were little changed, while public sector paid employment rose (+45,000), after declining for much of the past six months. The share of all workers with a private sector job sits at 65.5%, at its 2019 average (65.5%).

• Provinces: Seven provinces saw job gains in September, led by Alberta (+24,300) and Quebec (+22,200). Ontario (-5,700) saw the largest decline.

• Demographics: Among Canadians aged 15-64, the participation rate rose to 79.5% (+0.2 p.p.), above the U.S. rate (75.0%). Among women aged 25-54, the participation rate also rose by 0.2 p.p. to 85.1%, below its recent record high (85.7%) but also above the U.S. rate (77.7%). The youth (aged 15-24) unemployment rate rose 1.1 p.p. to 13.9%, a setback but not enough to erase the drop of 1.7 p.p. seen over September and October. Meanwhile, for prime-working-age adults (aged 25-54), the participation rate rose to 88.5% (+0.3 p.p.) and the unemployment rate rose to 5.8% (+0.2 p.p.)—up 1.0 p.p. since last November.

• Wages: Headline wage growth fell sharply to 4.1% year-over-year (-0.8 p.p.) but remains well above its 2019 average (2.7%). Wage growth (4.9% in October) has outpaced inflation (2.0% in October) for 21 straight months. Fixing the composition of the workforce, wage growth also fell sharply to 3.7% year-over-year (-0.8 p.p.).

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