MNI: Canada Nov Unemployment Nears Record Low, Wages Stay Hot

Canada's unemployment rate fell a notch taking it back towards a record low in November while wage gains continued at about the fastest pace since 1997, arguing against the central bank signaling a pause in hiking interest rates next week.

The jobless rate declined to 5.1% from October's 5.2%, Statistics Canada said Friday, beating expectations it would instead climb a notch. Employment rose by 10,100, matching forecasts and the third consecutive increase.

Wage gains were the focus of many economists with the Bank of Canada set to raise interest rates again on Wednesday to bring down inflation. For a second month wages climbed at a 5.6% pace that was the highest in decades outside of the early part of the pandemic when many lower-paid workers were laid off. November is also the sixth straight month of gains exceeding 5%.

Bank Governor Tiff Macklem has said that while the end of the hiking cycle is near, the economy remains overstretched and more action is needed. A bare majority of economists predict the 3.75% policy interest rate will climb another 25bps next week, with the rest calling for a half-point move.

Finance and manufacturing led the job gains, while the interest-rate sensitive construction sector and manufacturing were among the largest declines. Full-time positions rose 50,700 and part-time declined by 40,600. 

Amid widespread forecasts Canada's economy is on the brink of recession, hours worked were little changed in November, and up 1.8% from a year ago. Some economists see hours worked as a proxy for output. The jobless rate meanwhile remains close to the record low 4.9% set earlier this year.

Employment has climbed about 369,000 over the past year, or by 1.9%. Full-time work has grown 2.9% while part-time declined 2.5%. The employment rate among so-called core-aged women reached a record high 81.6% in November, a shift coming after the government expanded subsidized child-care.