Unemployment rate rises to 5.8% in November

Canada's unemployment rate ticked up to 5.8% last month, as high interest rates weigh on job creation at a time when the country's population is growing rapidly.

Statistics Canada released its November labour force survey Friday, showing the economy added a modest 25,000 jobs.

Manufacturing and construction saw 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 bounce back 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.

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

The weaker job market also means more workers are finding themselves unemployed due to layoffs. Friday's report says unemployed people last month were more likely to have been laid off compared with a year ago.

Despite those trends, however, average hourly wages continued to grow quickly—rising 4.8% from a year ago—as workers seek compensation for the recent runup in inflation.

The Bank of Canada is set to announce its next interest rate decision on Wednesday, as forecasters widely believe the central bank is done raising rates.

Its key interest rate currently sits at 5%, the highest it's been since 2001.