Canada's employment growth rebounded, somewhat, in November, but remains weak - rising by 51,000 or a tepid 0.2 percent from October, above expectations in Econoday's survey of forecasters for a 30,000 gain. The unemployment rate rose to 6.8 percent in November from 6.5 percent in October, as the labor force grew. Forecasters looked for unemployment to rise to 6.6 percent in November.

The November unemployment rate hit its highest level since January 2017 (not counting the COVID-impacted impacted 2020-2021 period) and has been on an upward trend since April 2023 up 1.7 percentage points. This data supports another rate cut by the Bank of Canada when it meets on December 11 and might even push the central bank to deliver another aggressive 50 basis point reduction.

The participation rate rose to 65.1 percent in November from 64.8 percent in October and versus 64.9 percent in September. The participation rate is down 0.5 percentage points compared to a year ago.

Total hours worked fell 0.2 percent in November but are up 1.9 percent from a year ago. Average hourly wages increased at a slower pace, rising by 4.1 percent year-over-year after the annual growth rate was 4.9 percent in October, and +4.6 percent in September.

November was the fifth straight month of relatively weak employment growth. For November, employment gains were mainly in full-time work, up 54,000 or 0.3 percent.

Private sector jobs rose by a mere 6,300 in November after a 20,500 increase in October. Public sector employment increased by 45,000 after falling by 17,200 in October and self-employment shrank by 700 in November.

Employment growth has been sluggish this year, reflecting Canada's stagnant economy. Forecasters call for jobs up 30,000 with the unemployment rate ticking up from 6.5 percent in October to 6.6 percent in November.

The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.

As in the U.S., this report is used as an indicator of the health of the domestic economy. Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.

The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.

The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.

The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.