Canada’s Unemployment Rate Explodes to 6.8%: Is a Massive Rate Cut the Lifeline or a Mirage?
Canada’s unemployment rate has exploded to a staggering 6.8% in November—the worst since January 2017 outside pandemic mayhem—shaking the foundations of the nation’s already fragile economy.
This staggering surge has economists scrambling, with whispers of a bold 50-basis-point rate cut by the Bank of Canada now echoing louder than ever. Will the central bank bite the bullet and slash rates next week to stem the bleeding?
Friday’s grim jobs report from Statistics Canada has markets reeling and analysts sounding alarms. With the current policy rate stuck at 3.75%, the pressure is mounting for the Bank of Canada to make a dramatic move—or risk being accused of fiddling while the economy burns.
The numbers tell a troubling story: a meager 51,000 jobs added in November, with a jaw-dropping 45,000 of them in the public sector, leaving the private sector gasping for air. The unemployed population now stands at 1.5 million—an eye-popping increase of 276,000 over the past year. Disturbingly, nearly half have been jobless for over a year or never held a job at all, underscoring a labor market in deep disarray.
Youth unemployment has rocketed to 13.9%, erasing hard-won gains from earlier in the fall. Core-aged women haven’t fared much better, with their unemployment rate ticking up to 5.8%, while core-aged men remain trapped at 5.7%. Meanwhile, the employment rate has stagnated at 60.6%, a glaring sign that Canada’s economy is failing to create enough jobs to meet the surging demand from desperate job seekers.
“November saw the largest flood of job seekers since the post-lockdown hiring spree in 2022—far beyond what our sluggish economy can handle,” warns David Rosenberg, president of Rosenberg Research & Associates Inc.
Though sectors like construction, retail, and professional services managed to eke out job gains, losses in manufacturing, transportation, and natural resources wiped out any meaningful progress, leaving the overall outlook bleak.
But not everyone is sold on the idea of a rate-cut hail Mary. James Orlando, senior economist at Toronto-Dominion Bank, insists the labor market is sturdier than it appears.
So, is slashing rates by 50 basis points the miracle cure Canada’s economy desperately needs—or just a sugar rush that masks deeper structural failings? Time is running out, and the stakes have never been greater. Next week’s decision by the Bank of Canada could set the tone for the nation’s economic future. Will they deliver salvation—or a band-aid?