After months of rising unemployment and subdued hiring, the November 2025 Labour Force Survey marked a clear turn in the Canadian labour market narrative. Employment grew by 54,000 jobs in November, a 0.3 percent monthly increase and the third consecutive gain since September. The employment rate edged up to 60.9 percent, and the unemployment rate dropped 0.4 percentage points to 6.5 percent, its lowest level since mid 2024 and well down from the 7.1 percent peak reached in September.

This is not a trivial rebound. Over the three months from September to November, Canada added roughly 181,000 jobs, reversing the near standstill that had characterized the first eight months of the year. RBC Economics notes that the November increase comes on top of strong gains in September and October, and that the unemployment rate is now slightly below its level a year ago for the first time since spring 2023. 

At the same time, the improvement has to be read against a changing demographic backdrop. The Bank of Canada estimated in its October Monetary Policy Report that, with population growth slowing, fewer than 5,000 jobs per month are now needed to keep the employment rate steady, compared with an average of 18,000 per month in the pre-pandemic years and more than 60,000 in early 2024 when population growth was much stronger.  By that benchmark, the recent three month run of job growth looks very robust, even if it follows a soft patch earlier in 2025.

Youth-driven gains and the rise of part-time work

The composition of job growth in November matters as much as the headline numbers. Employment gains were heavily concentrated among youth aged 15 to 24, who added 50,000 positions, an increase of 1.8 percent in a single month. These were the first sustained monthly gains for youth this year and follow a period in which the youth unemployment rate had climbed as high as 14.7 percent in September, the highest level since 2010 outside the pandemic years. 

By November, the youth unemployment rate had fallen to 12.8 percent, with the youth employment rate up 1.7 percentage points from its July low. That improvement suggests that younger workers are finally finding better traction in sectors that had been squeezed by higher interest rates and trade uncertainty earlier in the year.

The quality of jobs is more mixed. StatCan reports that November’s gains were driven by part-time work, which rose by 63,000 jobs, while full-time employment grew more modestly. Over the last three months, part-time positions increased by 2.7 percent compared with 0.5 percent for full-time roles. Involuntary part-time work, however, remains below pre-pandemic norms, with 17.9 percent of part-time workers saying they want but cannot find full-time hours, slightly lower than the 2017 to 2019 average. 

Taken together, this points to a labour market that is creating opportunities, but still leaning toward shorter hours and flexible work arrangements, a pattern that has implications for earnings stability and household income.

Sector signals: care economy up, retail and trade under strain

The sector breakdown paints a familiar picture for 2025. Healthcare and social assistance delivered the largest employment increase in November, adding 46,000 jobs or 1.6 percent in a single month and 79,000 positions over the past year. Persistent demand for nurses, personal support workers, community care staff, and allied health roles continues to drive structural hiring in this part of the economy, reflecting demographics, backlogs in care, and policy commitments at both federal and provincial levels.

Accommodation and food services also posted a rare gain of 14,000 jobs, the first increase since January, which suggests that tourism and hospitality demand is holding up despite higher borrowing costs and global uncertainty. Natural resources added 11,000 jobs, with strength concentrated in energy-producing regions such as Alberta. 

The main counterweight came from wholesale and retail trade, where employment fell by 34,000 in November and largely reversed the strong increase recorded in October. The bulk of the decline was in Ontario and Quebec. This sector has been squeezed by tariffs, slower goods demand, and tighter margins, and the November numbers reinforce the idea that consumer facing employers are more cautious on staffing than those in health, social assistance, and resource industries.

External indicators point in the same direction. The S&P Global Canada Services PMI dropped sharply into contraction territory in November, falling to 44.3 from 50.5 in October, with the employment subindex down to 47.1, its weakest reading since mid 2020. The Ivey PMI also turned negative, with a headline reading of 48.4 and an employment component of 48.0, both below the 50 threshold that separates expansion from contraction. Sector level hiring is therefore expanding in some pockets even as survey based measures show broader caution among firms.

A regional labour market that is no longer moving in lockstep

Provincial patterns are becoming more pronounced. Alberta led the country in November, with employment rising by 29,000 jobs or 1.1 percent in a single month and 105,000 jobs over the past year, a 4.2 percent gain. The provincial unemployment rate dropped to 6.5 percent, the lowest since March 2024, and jobless rates fell in both Calgary and Edmonton. 

New Brunswick and Manitoba also saw meaningful gains, adding 5,500 and 4,500 jobs respectively, with New Brunswick’s unemployment rate dropping 1.3 percentage points to 6.6 percent. British Columbia and the Atlantic provinces recorded smaller but positive changes.

In contrast, Ontario and Quebec saw little net change in employment in November and have shown virtually no net job growth since January, according to StatCan’s year to date comparison. Ontario’s unemployment rate still fell to 7.3 percent, while Quebec’s rate held near 5.1 percent, but in both cases the improvement is partly due to fewer people searching for work rather than a surge in new hiring. 

For staffing and recruitment, this means the hottest demand is currently in Alberta and in parts of the Atlantic region, while central Canada is characterized more by churning within existing headcount and selective backfilling than broad based expansion.

Participation, job security and wages: a subtle tightening

One of the more nuanced signals in the November report is the combination of lower unemployment and a slight pullback in labour supply. The total labour force shrank by about 26,000 people in November, and the participation rate fell 0.2 percentage points to 65.1 percent. In other words, fewer people were either working or actively looking for work, even as more jobs were filled.

Some of this reflects the same immigration dynamics that the Bank of Canada has highlighted. Slower population growth means fewer new entrants to the labour force, and that intensifies the impact of any given level of job creation on the unemployment rate. 

Job security perceptions are more fragile than the headline numbers suggest. StatCan’s special spotlight finds that 73.6 percent of employees feel their job is secure over the next six months, down more than 4 percentage points compared with late 2023.  Layoff rates, however, remain close to pre-pandemic norms, and the share of unemployed people who find work from one month to the next has improved modestly compared with a year earlier. 

Wage growth is steady but no longer accelerating. Average hourly earnings rose 3.6 percent year over year in November, roughly unchanged from October and broadly in line with the 4 percent increase reported by some private sector analysts.  That pace is above the latest inflation readings but below the peak wage pressures observed in 2022 and early 2023, which supports the idea that the labour market is firming without returning to the overheating conditions of the previous cycle.

How markets and policy makers are reading the data

Financial markets reacted quickly. Stronger than expected job growth and the drop in unemployment have pushed investors to scale back expectations for additional interest rate cuts and, in some cases, to begin pricing the possibility of another rate hike by late 2026. The Canadian dollar climbed to a ten week high against the US dollar on the back of the November report, marking its largest daily gain since May. 

The Bank of Canada’s June analytical work on labour market benchmarks already argued that the job market had moved close to balance before the trade war induced slowdown, with unemployment retreating from its recent peak and job vacancies drifting lower after the explosive post pandemic phase. Since then, StatCan data show that job vacancies have continued to normalize from their 2022 highs. The November report does not overturn the view that the labour market has cooled from its earlier extremes, but it does push back against the idea that Canada is sliding into a prolonged employment slump.

At the same time, other indicators are less upbeat. Capital Economics, for example, still expects Canadian GDP growth to average less than 1 percent annualized in the second half of 2025, with the unemployment rate drifting back toward 7.3 percent in early 2026 despite the latest upside surprise.  The contraction in both the services PMI and Ivey PMI reinforces the sense that company level hiring intentions are cautious even as the current employment stock holds up. 

Outlook: cautious improvement rather than a new boom

Looking ahead to early 2026, the November Labour Force Survey suggests a labour market that is firmer than many expected, but still governed by cross currents.

On the positive side, three consecutive months of employment gains, falling unemployment, and an improving job finding rate indicate that the worst of the 2025 slowdown may be behind Canada, at least in aggregate. Youth employment is finally recovering (although more data points would be needed to confirm that), healthcare and social assistance continue to expand capacity, and Alberta and parts of the Atlantic region are generating significant numbers of new roles. 

On the cautionary side, the recovery is leaning heavily on part-time roles, retail and trade employment is under pressure, participation has dipped, and business surveys show hiring and new orders contracting. External headwinds from US tariffs and global demand, together with slower credit growth, will likely limit the pace of job creation in interest sensitive sectors through the first half of 2026. 

In practical terms, this points to a labour market that may continue to generate modest net job gains, but with more rotation across sectors and regions than a broad rising tide. Healthcare, social assistance, parts of hospitality, and resource-linked value chains are likely to remain the most reliable sources of demand, while retail, some professional services, and trade exposed manufacturing will still be careful about adding permanent headcount.

The November data changes the tone: from fears of an imminent labour market downturn to a picture of cautious resilience supported by structural hiring in key sectors and a smaller inflow of new job seekers. Whether that resilience can be sustained will depend on how quickly global trade tensions ease, how long PMIs remain in contraction territory, and how the Bank of Canada calibrates policy in response to an economy that is no longer weak enough to justify aggressive easing, but not yet strong enough to declare victory.

Minh Dang - Editor in Chief

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