Canada's unemployment rate shrinks to lowest in 16 months as part-time jobs increase

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Canada's unemployment rate in November falls to 6.5%

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Economy adds a net of 53,600 jobs in November

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Canada has now added 181,000 new jobs since September

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Average hourly wage growth of permanent employees at 4%

By Promit Mukherjee

OTTAWA, Dec 5 (Reuters) - Canada's unemployment rate once again defied expectations and fell to a 16-month low in November as a solid gain in part-time jobs boosted the number of people employed for the third time in a row, data showed on Friday.

The unemployment rate fell 0.4 percentage points in November to 6.5%, the lowest since July 2024, Statistics Canada said, adding it was led by 53,600 net job gains in November mainly among youth.

The job gains were driven by a 63,000 net addition in the part-time workforce linked to the healthcare and social assistance sector, StatsCan said.

With three months in a row of job gains, the Canadian economy has now added 181,000 new jobs since September, offsetting an almost no change in jobs for the first eight months when U.S. tariffs and trade uncertainty choked hiring.

Analysts polled by Reuters had forecast employment to decrease by 5,000 jobs in November and the jobless rate to tick up to 7%. The improvement in the unemployment rate was also helped slightly by a reduction in the total labor force as immigration curbs instituted by the government sent less people into the job market.

YOUTH EMPLOYMENT IMPROVES

Canada's unemployment rate had been steadily climbing since March when President Donald Trump unleashed a raft of tariffs on critical sectors such as steel, aluminum, cars and every other industry that did not comply with a free trade deal.

The impact has been more acute among the youth, or those aged between 15 and 24 years. But November and October were the outliers. Employment in this category was up by 50,000 in November, and with October, these were the first jumps in youth employment since the start of the year, StatsCan said.

The youth unemployment rate fell 1.3 percentage points to 12.8% in November, following a slight decline in October. In September the youth unemployment rate had peaked at a 15-year high. Employment among the core-aged group, which accounts for two-thirds of the total labor force, was little changed in November.

The average hourly wage of permanent employees - a gauge closely tracked by the Bank of Canada to ascertain inflationary trends - stayed at 4% in November, same as the previous month. The labor force data is the last major data set to come before the Bank of Canada's monetary policy decision next week. Money markets are seeing an almost 93% chance of a hold, and Friday's numbers are likely to further bolster the expectations. The Canadian dollar gained after the data and was trading up 0.37% to 1.3904 to the U.S. dollar or 71.92 U.S. cents.

(Reporting by Promit Mukherjee; Editing by Dale Smith and Chizu Nomiyama )