Canada’s part-time employment rate gained ground in November, while full-time jobs shrunk and the unemployment rate rose.

Employment rose 14,000 in November after rising 2,000 in October and 20,000 in September. However, Bank of Montreal economists’ note that job growth continues to be concentrated in part-time work, with full-time employment shrinking 43,000. Despite the overall employment gain in November, the unemployment rate moved up 0.2 percentage points to 7.5%, as the labour force swelled by 59,000 people. This is the highest jobless rate since August 1999.

The strength was spread across several areas, led by the retail and wholesale trade sector. New positions were also added in professional, scientific and technical services, and health care and social assistance added 14,000 new positions in November. The manufacturing sector, the airline industry and the construction sector led the decline in full-time work.

BMO Nesbitt Burns says, “the world’s strangest recession just got a little stranger. First, home sales hit record highs in Canada, and then auto sales rebound and are poised to reach an all-time high for the year. Now, employment has posted its third consecutive increase into the teeth of a mountain of downbeat anecdotal reports on the economy.”

CIBC World Markets is also incredulous, noting, “employment continues to do the unexpected, that is, rise while the economy is in general decline. Can this trend continue? The risks are clearly tilted to the downside in the months ahead, with an unwinding of recent gains paving the way for an 8% jobless rate in the first half of 2002.”

BMO says it believes the Bank of Canada will lower overnight rates a further 25 basis points in January, just for insurance against the risk of a deep recession. CIBC suggests a more aggressive move may be in the offing, noting the Bank will see one more employment report before its next meeting. It expects meaningful job losses to pave the way for a half-point cut.