Kelowna's unemployment rate cools along with the rest of the country's

Jobless rate back to normal

After several months of historically low figures, Kelowna’s unemployment rate shot up in November to a more normal number.

The jobless rate jumped a whole percentage point, according to Statistics Canada, from 2.9% in October to 3.9% last month. The number of people who were able to work fell by 3,600 people last month, but the total number of those who were actually working dropped by 4,500.

Kelowna’s unemployment mark hit 2.5% in September, which was the lowest it had ever been since the statistic started being tracked in 2006.

The 3.9% tally was still the fourth lowest mark among Canada’s 37 metropolitan areas in November.

Meanwhile, the Thompson Okanagan unemployment rate dropped to 3.1% last month, which is the lowest it has been over the last two years.

Overall, Canada’s unemployment rate continued to trend higher as the Bank of Canada’s steep interest rate hikes weighed down the economy and left workers with fewer options in the job market. The national jobless rate rose to 5.8% in November, and the economy added a modest 25,000 jobs, slightly surpassing forecasters' expectations but trailing the pace of population growth.

Coupled with Thursday’s weak GDP numbers, the job report reinforces economists’ belief that the Bank of Canada will continue to hold its key interest rate steady at its decision meeting next week.

Manufacturing and construction had the largest gains in employment, while the most jobs were shed in wholesale and retail trade as well as finance, insurance, real estate, rental and leasing.

The unemployment rate was 5.7% in October.

After the labour market experienced a strong bounceback from the pandemic, the unemployment rate has been on an upward trend since April as the Canadian economy shows clearer signs of weakness.

Real gross domestic product, which measures the size of the economy, has been struggling to consistently grow over the last year. The most recent GDP report showed the economy shrank 1.1% on an annualized basis in the third quarter.

“Partially echoing yesterday’s GDP report, Canada’s economy is hanging in, but the clear softening in the labour market is consistent with continued soft growth,” Benjamin Reitzes, BMO’s managing director of Canadian rates and macro strategist, wrote in a client note.

“While the headline (employment) increase was better than expected, the ongoing increase in the unemployment rate is the bigger story, and likely better reflects the state of the economy.”

Canada’s unemployment rate is now hovering around pre-pandemic levels but is expected to continue rising as higher borrowing rates weigh on businesses.

— with files from The Canadian Press

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