Rising Unemployment as Job Growth Slows in Canada

The recent RBC report highlights a concerning trend in Canada’s labour market: job creation is lagging behind the rapid growth of the labour force, leading to a projected unemployment rate increase to 6.7% in November from 6.5% in October.

This disparity underscores the challenges of sustaining employment levels amid swift population growth. Notably, job vacancies have decreased by 18% year-over-year as of September, indicating a cooling hiring environment. In contrast, the U.S. labour market appears more robust, with anticipated payroll employment growth of 157,000 jobs in November and a steady unemployment rate of 4.1%. These dynamics suggest that the Bank of Canada may consider more substantial interest rate cuts compared to the U.S. Federal Reserve in the coming year to stimulate economic activity.

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