Canada’s unemployment rate fell to 6.5% in November, a steep drop from

Canada’s unemployment rate dropped to 6.5 per cent in November, Statistics Canada said on Friday, bringing the rate to a 16-month low and making a year-end interest rate cut an unlikely occurrence, according to economists.

The jobless rate fell several points from October’s 6.9 per cent after trending upward for most of the year, even hitting 7.1 per cent in September — a high not seen since May 2016, excluding the COVID-19 pandemic years.

“The last time we saw a 6-tick drop in the unemployment rate in a two-month span (aside from the wildness around COVID) was during the last tech boom in 1999,” wrote Douglas Porter, chief economist at BMO, in a note to clients.

“A significant cool-down in population growth, and thus the labour force, is a major factor behind the reduced pressure on the jobless rate,” he added, with the number of people participating in the labour force having ticked down in November.

Meanwhile, the economy also gained an unexpected 54,000 jobs last month, marking the third monthly increase in a row — though most were part-time.

The majority of growth came from the private sector, and the overall increase was largely driven by employment gains among young people between the ages of 15 to 24.

That group was burdened by a difficult job market through most of 2025, struggling with a stubbornly high unemployment rate that has now edged down to 12.8 per cent.

“The jobless rate of Canadians under 25 is still elevated compared to other groups, but this was a positive development,” noted Brendon Bernard, senior economist at Indeed Canada.

Rate cut unlikely next week, say analysts

The growth was driven by several sectors, including health care and social assistance, accommodation and food services, and natural resources. But jobs were lost in wholesale and retail trade, offsetting an industry increase seen the previous month.

Alberta drew the most gains, adding 29,000 jobs last month, with New Brunswick and Manitoba adding several thousand each. Employment was unchanged in the other provinces.

On a yearly basis, average hourly wages grew 3.6 per cent, or $1.27, to $37.00 an hour.

“This solid jobs report follows a series of better-than-expected results on the Canadian economy in recent weeks, including the upside surprise on Q3 GDP and the earlier robust job gains,” wrote Porter.

“Coupled with inflation that has been running a tad hot of late, this quashes any lingering prospect of a near-term Bank of Canada rate cut.”

RBC assistant chief economist Nathan Janzen echoed that assessment, with recent GDP, labour market and inflation data making it unlikely that the Bank of Canada will cut any time soon.

“The November labour market data likely cements that decision, and also is consistent with our base-case that the BoC will not need to reduce interest rates again through next year.”

The Bank of…