Question Period Note: Labour Force Survey - November 2023

• Employment rose by 25,000 in November, above market expectations of a 14,000 gain.

• The unemployment rate edged up to 5.8% (+0.1 p.p.), while the labour force participation rate was unchanged at 65.6%.

• The Canadian economy added 25,000 jobs in November, with the unemployment rate rising to 5.8%.

• The labour market is showing signs of cooling but remains relatively resilient.

• Over one million more Canadians are employed today than were prior to the pandemic, and Canada’s unemployment rate, at 5.8 per cent, is low by historical standards.

• The labour market continues to benefit from more people entering the labour force looking for work. The labour force participation rate for women in their prime working years is near record highs.

• Fall Economic Statement 2023 made investments in workers to grow Canada’s economy, create good-paying jobs, and tackle Canada’s investment and productivity challenges.

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• Bottom Line: Employment grew by 25,000 in November—above expectations but slower than required to keep up with population growth. The report’s details indicate a continued gradual softening in the labour market, with a decline in hours worked and unemployment on the rise. At 5.8%, the unemployment rate is up 0.8 p.p. since April and now slightly above its pre-pandemic level (+0.1 p.p.). redacted

• Key Labour Market Indicators: Employment is now 5.7% above pre-pandemic, with 135% of pandemic job losses recouped—well ahead of the U.S. (121% in October). The unemployment rate rose to 5.8% and is now above pre-pandemic (5.7%). Using U.S. concepts, the unemployment rate edged down to 4.7% (-0.1 p.p.) and remains above the U.S. rate (3.9% in October). The labour force participation rate held steady at 65.6%. Among Canadians aged 15-64, the participation rate edged down to 80.1% (-0.1 p.p.), well above the U.S. rate (74.9% in October). Among women aged 25-54, the participation rate ticked up to 85.6% (+0.1 p.p.), still near its record high (85.7%) and well above the U.S. rate (77.6% in October).

• Full-time Jobs and Hours Worked: Gains were concentrated entirely in full-time jobs (+60,000), with fewer part-time jobs compared to October (-35,000). Despite this, total hours worked fell by 0.7% and now sit 3.8% above pre-pandemic levels.

• Industries: Employment growth was mixed across sectors. In a reversal of recent trends, employment growth was stronger in goods industries (+38,000) than services industries (-13,000), reflecting solid gains in manufacturing (+28,000) and construction (+16,000), while wholesale and retail trade (-27,000) and finance, insurance and real estate (-18,000) posted notable losses. Job gains were also concentrated in the private sector (+38,000), with a smaller gain in the public sector (+12,000) and some offset from lower self-employment (-25,000).

• Provinces: Job gains were concentrated in British Columbia (+9,000), Alberta (+8,900), and Ontario (+6,500).

• Demographics: Surging population growth (+78,000) continued to drive strong gains in the labour force (+36,000), but the labour market may be starting to struggle to absorb these new workers. All age groups saw job gains in November except for youth (-13,000). The youth unemployment rate rose to 11.6% (+0.2 p.p.)—a third consecutive increase.

• Wages: Headline wage growth held steady at 4.8% year-over-year in November, well above the 2.7% growth seen pre-pandemic (2019 average). The three-month wage growth accelerated (+1.2 p.p.) to 6.0% (annual rate, seasonally adjusted). Adjusting for changes in the composition of the workforce, wage growth held steady at 4.3% year-over-year—on the low end of its 4-5% range over the last year.

• Outlook: While the labour market remains strong by historical standards, it is showing clear signs of cooling. Job gains are lagging population growth, and the unemployment rate is up notably since the beginning of the year. redacted