Canada’s labor market refuses to slow down. Statistics Canada reported Friday that the economy added a stunning 53,600 jobs in November 2025 — the third consecutive month of massive upside surprises and far above the 25,000 gain economists had penciled in. The unemployment rate tumbled to 6.5%, its lowest level since July 2024, defying forecasts of a rise to 6.8%.
Full-time employment surged by 62,300, while part-time roles actually declined. The private sector led the charge with 47,000 new hires, and goods-producing industries — especially manufacturing and construction — posted their strongest gains in over a year. Average hourly wages rose 3.4% year-over-year, the fastest pace since June, adding fuel to inflation concerns.
Markets wasted no time reacting. The Canadian dollar jumped more than a full cent to a fresh 11-week high above 72.70 US cents, while two-year Government of Canada bond yields spiked 18 basis points — the biggest one-day jump since 2022. Overnight index swaps now fully price in a Bank of Canada rate hike by October 2026, with 65 basis points of tightening baked in through 2027 — a dramatic reversal from the 50+ basis points of cuts traders expected just last week.
“This is a game-changer,” said Avery Shenfeld, chief economist at CIBC Capital Markets. “Three straight blowout reports tell us the labor market is not just resilient — it’s heating up. The Bank of Canada’s easing cycle is officially on ice, and the next move is far more likely to be up than down.”
Governor Tiff Macklem and the BoC face their final policy decision of 2025 next Wednesday, December 10. Markets and every major-bank economist now expect the benchmark rate to stay at 2.75% — a sharp pivot from the quarter-point cut many anticipated before these jobs numbers rolled in.
For everyday Canadians, the report is a mixed blessing. More jobs and faster wage growth mean greater financial security for thousands of households, especially in Ontario and British Columbia where most of the gains were concentrated. But higher borrowing costs now loom larger for anyone with a mortgage renewal in 2026 or 2027.
Across the border, U.S. investors and exporters are taking notice. A stronger loonie makes Canadian vacations and cross-border shopping more expensive for Americans, while U.S. manufacturers selling into Canada face stiffer price competition. Energy markets are watching closely too — a hawkish BoC typically supports a firmer Canadian dollar, which can pressure Western Canadian Select oil prices lower relative to WTI.
Social media is already lighting up. “Told you the recession was cancelled,” one Toronto tech worker posted alongside a rocket emoji. Meanwhile, variable-rate mortgage holders are posting far less celebratory memes.
Bottom line: Canada’s jobs boom has flipped the monetary-policy script. Instead of more rate cuts in 2026, traders are now betting on the first hike in over three years — and they’re putting real money behind it.
*By Sam Michael*
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