RBC analysts outline what will be watched closely in the upcoming labour report
Canada’s employment growth is projected to remain flat in November following two months of stronger-than-expected gains, according to Royal Bank of Canada (RBC) economists.
The November employment report, scheduled for release Friday, will serve as the final major data release before the Bank of Canada’s interest rate decision on Dec. 10. Nathan Janzen, assistant chief economist at RBC, and economist Abbey Xu anticipate no change in the unemployment rate, which is expected to hold steady at 6.9%.
“We expect employment growth to be flat in November, following larger-than-expected 67,000 and 60,000 increases in October and September, respectively,” the economists wrote in their weekly Forward Guidance report dated Dec. 1, 2025.
Slower population growth is expected to limit new entrants into labour markets, contributing to the stable unemployment rate. The 6.9% figure would mark the first month since May 2023 without a year-over-year increase.
Canadian labour markets remain soft, with the unemployment rate roughly one percentage point above what economists consider consistent with normal conditions. However, the economists noted that the 7.1% unemployment rate in September and August has shown some stabilisation.
Employment in trade-exposed sectors such as manufacturing, transportation, and warehousing has underperformed broader trends but showed significant improvement in October. The rise in unemployment has largely reflected longer job search times for new entrants rather than widespread layoffs. Canada’s overall employment count stood 299,000 higher in October compared with a year earlier.
Industry data from Indeed showed continued signs of stabilisation in hiring demand, while business confidence measures have improved as more damaging international trade scenarios from earlier in the year have not materialised.
The economists will closely monitor hours worked, which declined in October despite employment gains, largely due to a teachers’ strike in Alberta. This decline is expected to reverse in November.
Wage growth unexpectedly increased in October, but the economists project it will continue to edge lower in the near term, supported by business surveys indicating smaller planned wage increases.
In October’s interest rate cut, the Bank of Canada signalled that interest rates had been adjusted to approximately where they should be, at the lower end of the estimated neutral range. This positioning makes additional reductions unlikely without significant downside surprises in growth or inflation, according to the RBC economists.
The release of Canadian international trade data has been delayed due to the US government shutdown, along with US employment and trade data.
