The Canadian labour market was booming last month—at least when it came to statistical modeling. Statistics Canada’s (StatCan) latest Labour Force Survey (LFS) shows 5-digit job growth and a plunging unemployment rate in November. Reality is a little different, as most benefits only exist in the statistical model. The gap between headline reports in the media is amplifying anxiety for workers, who now feel as secure as a person stuck between a pandemic and borrowing costs rising 19x.
Canadian LFS Shows 54k Jobs Added, Unemployment Plunges
Canada’s headline jobs data showed the labour market is booming—at least on paper. Seasonally adjusted employment climbed 0.3% (+54.0k jobs) in November, setting a record high of 21.14 million employed. The unemployment rate also shed 0.4 points in a single month, falling to 6.5%—the lowest rate since July 2024. For context, a swing of 0.4 points is massive volatility usually reserved for economic shocks—rarely do we see this kind of movement in a stable economy.
Canadian Job Gains Exist Solely In Modeling, Not Reality
Those who don’t exactly feel a boom are probably better off sticking with their gut here. Unadjusted data shows employment fell 0.04% (-7.9k jobs) to 21.12 million employees. The unemployment rate still contracted, but the change was half the size—falling 0.2 points to 6.1%, the lowest since October 2024. It’s worth noting that the drop is roughly half the size but the unemployment rate still remains much lower, indicating the problem was never quite as bad as framed. Not great, but not bad either.
Most participants in the economy may feel different from political spectators cheering from the stands. Especially those amongst the public service, where a semi-purge has begun, with major Crown Corps warning of cost cutting measures. There’s a good explanation for that disconnect—seasonal adjustments.
As discussed with the wild read on GDP, seasonal adjustments are designed to smooth predictable seasonal patterns. When those patterns are off due to recession, war, etc.—they tend to over and underamplify trends. In this case, the model expected a massive winter purge. When the losses were smaller than historical averages (-7.9k), the calculator treated ‘less bad’ as ‘good,’ translating 7.9k jobs lost into 54.0k gained. Great for those who live in models (and the performance they show). A big letdown for anyone that has to live in reality.
Is It Me? Employee Sentiment Gap Sends Layoff Fears Higher
The Share of Workers Who Feel Secure About Employment For The Next 6 Months, By Industry.
Source: StatCan.
A gap between positive data in the media and reality will often create a sentiment gap. This is where workers feel different from what the news is reporting, resulting in that feeling that they’re doing worse than their peers. Sucks for them, we know—but it also sucks for the economy. When people experience a negative sentiment gap, they’re more likely to expect job losses, and pull back on spending. This can have a profound impact on the sales of durable goods—expensive purchases that are made for multi-year consumption, such as new cars and housing.
Lucky for us, StatCan does a periodic update of worker sentiment, and adds the supplement to the latest data. Only 73.6% of employees felt secure in November, meaning they did not fear job losses within the next 6 months. It’s a decline of 4.1 points from November 2023, the last direct comparable provided. The drop was sharpest in Public Administration where sentiment collapsed by 12 points to 77% feeling secure. The agency also made note of a substantial drop in Educational Services which fell 8.5 points to 77.6%, and professional, scientific and technical services down 7.5 points to 69.5%.
Canadian Workers Feel Stuck Between Pandemic & Record Rate Hikes
While there’s no direct comparable, the flip side of that stat provides some context. A previous similar StatCan survey found just over 1 in 3 workers (34.5%) feared losing their job within 4 weeks in April 2020, at the height of pandemic fears. Last month’s data reveals over 1 in 4 (26.4%) workers didn’t feel secure for the next six months, up 4.1 points from 2 years ago. Worker sentiment is halfway between a pandemic meltdown and a record surge in interest rates that sent the base cost of borrowing 1,900% higher within two years. I guess the takeaway is that workers feel better than thinking they’re going to die from a virus but worse than if their borrowing costs increased 19x.
Either way, the impact is similar. Scared workers are less likely to consume, producing a greater drag on the economy. That fear is amplified by the fact that policymakers are simultaneously telling workers the economy is absolutely booming, and faces imminent collapse due to the existential threat du jour—trade war, artificial intelligence, China, Russia, the end of the Fast & Furious movies—it doesn’t matter. A problem that gets amplified by economists placing emphasis on living life one-quarter at a time, without understanding a loss is a loss—whether it’s an inch or a mile.
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