By Kim Mackrael

OTTAWA -- The Canadian economy unexpectedly shed jobs in November and the unemployment rate rose to its highest level in more than a year, marking a sharp retrenchment for a jobs market that has largely been a bright spot for Canada.

Canada's labor market shed a net 71,200 jobs in November on a seasonally-adjusted basis, Statistics Canada said Friday. Market expectations were for a gain of 10,000, according to economists at BMO Capital Markets.

The November data follows a small decline in the previous month and notable advances in August and September. Despite the November decline, job growth was still up 292,900, or 1.6%, on a year-over-year basis, with most of the net gain in the full-time category.

The jobless rate moved up to 5.9% in November, its highest level since August 2018. Market expectations were for the unemployment rate to remain unchanged at 5.5%. When using U.S. Labor Department methodology, Canada's unemployment rate was 4.7% in November.

On a more positive note, average hourly wages surged on an annual basis by 4.5%, after advancing 4.3% in each of the previous two months. At the beginning of the year, wage growth on an annual basis was close to 2%.

The November employment report comes two days after the Bank of Canada said it would keep its key interest rate on hold at 1.75%, citing early evidence that the global economy is stabilizing. A central bank official said Thursday that the Canadian economy's resilience -- including a healthy jobs market -- has allowed the Bank of Canada to chart its own course by keeping rates steady while others have eased policy.

In November, full-time employment fell by 38,400, while part-time employment dropped by 32,800. The ranks of the self-employed -- often independent contractors or freelancers -- declined by 18,700. The private sector lost 50,200 jobs in the month, and public-sector organizations shed 2,300 workers.

The Statistics Canada report said the bulk of the November job losses were in the manufacturing sector, which shed a net 27,500 jobs, and public administration, down 24,900 positions. On a year-over-year basis, employment in manufacturing was little changed, while employment in public administration was up 48,500.

Write to Kim Mackrael at kim.mackrael@wsj.com

(END) Dow Jones Newswires

December 06, 2019 09:51 ET (14:51 GMT)

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