The number of unemployed people in Canada reached 1.5 million in November, pushing the unemployment rate to the highest level in about eight years outside the pandemic era and boosting the chances of a major interest rate cut on Dec. 11.
The unemployment rate rose to a higher-than-expected 6.8 per cent in November, an increase of 1.7 percentage points since April 2023, Statistics Canada said on Friday.
The unemployment rate was last this high in January 2017, with the exception of a few months in 2020 and 2021.
Currency markets increased bets on a 50 basis point cut in interest rates to 80% after the employment report, from 55% earlier.
The odds of a 25 basis point cut in interest rates have shrunk to just one in five.
The report, which is the last data release before the Bank of Canada announces its final decision on interest rates for this year on Wednesday, also affected the Canadian dollar, as it weakened by 0.48% to 1.4090 against the US dollar, or by about 70.97 US cents.
Two-year government bond yields fell significantly by about 12.8 basis points to 3.026%.
Analysts polled by Reuters had expected a net increase of 25,000 jobs and an unemployment rate of 6.6% from 6.5% in October. The data showed that the economy added 50,500 jobs in November.
