The surge

First, the good news. Most people worked last month.

The bad news: The boys in Ottawa just got their excuse not to cut interest rates again this year. We’re done. Two nips of two-bits each, and the CB rate stays where she be. Mortgages are not going to careen into the 3% range after all.

The fact Canada created 67,000 hires last month, with the jobless rate falling to 6.9%, was a surprise. It came after an equally plump number in September – and this is a vast improvement from the summer months of sucky stats (losses topped 100,000).

So are things ducky now? Can we come out from under the covers?

Of course not, silly. The country is still skating along the edge of recession. Trump just slapped more tariffs on us. We hate Stellantis. The nosy Americans are now photographing and fingerprinting us at the border. The Dodgers won. Carney’s kicked out of the White House. Doug Ford is on the hit list of Seal Team 6. A new GTA condo still costs $1 million. Real estate is a swamp. And winter’s setting in.

Moreover, under the hood today’s job numbers are a bit sketchy. All of the net gain came from part-time positions – 85,000 of them. We actually lost almost 19,000 full-time positions. Also worrisome is the fact losses were recorded in 11 of 16 job categories, and total hours worked declined from the previous month.

It also looks like a huge jump in part-time employment surrounding the World Series games in Toronto helped blunt the impact of the teachers’ strike in Alberta. But the bottom line, says BMO Economics, is that our central bank will stand pat. “With the jobless rate dipping back below 7% and wages staying firm, it appears that the BoC will indeed pause in December.”

Now we should all realize that the central bankers do not want to cut more. It’s too scary. The full impact of Trump’s tariffs has yet to ripple through the economy. Those recent auto sector job losses (Brampton, Ingersoll) may be only the tip of the berg. Carney’s budget on Tuesday just signalled almost $80 billion in the annual deficit and a massive bump in fiscal stimulus. So inflation could come snaking back, even as the economy sputters along.

It’s a perilous time for the bankers, especially when we’re living next to a monster country that’s increasingly out of control. If the Supremes strike down Trump’s ‘emergency’ tariff powers there is no telling what his next steps will be, since Canada has been a special whipping-boy target.

What’s next?

The housing market will suffers further from lousy sales while the slow melt in prices continues. The construction business is doomed. Governments at all levels will fail in their home-building goals. More projects will be cancelled. Builders will fold their tents and disappear and, as the Ontario treasurer warned in his budget yesterday, the unemployment rate will pivot and increase (it’s already 9% in the GTA).

All this may slide the country into a shallow recession. It if persists too far into 2026, the central bank may be forced into lowering the cost of money to rescue things.

Meanwhile it’s hard to underestimate the impact on us of the chaos to the south. The US elections this week showed Trump’s iron grip has weakened. The continued shutdown in Washington is hurting the country, and now the equity markets. The contrast between a $300 million White House ballroom, a $1 trillion Elon Musk pay package and 42 million American running out of food assistance while air traffic controllers go unpaid is bizarre. No wonder Zo stormed NYC. The country is, like the title of the movie that just rattled the Pentagon, a House of Dynamite.

Things are tense, yes. But let’s be chill with what we’ve got. Leaders that aren’t completely crazy. No ICE. No raids. No mass deportation centres. More jobs, even if they’re slinging ballpark hotdogs. And the sexiest debt-to-GDP ratio in the G7. Plus Dax.

In a tenuous world, this is abundance.

About the picture: “This gentle village dog attached herself to our hiking group in Chefchaouen (Morrocco’s Blue City),” writes Catherine. “A natural shepherd, she accompanied us on a 9k hike through the Rif Mountain Valley and valiantly stood her ground when a yappy pack of hounds came snarling by (just like the steerage section here some days).  According to our guide, the ear tag indicates she’s been vaccinated. Many thanks for the financial shepherding provided on the blog by you and the team– I’ve been reading for ten years and your advice has helped us reach some unexpected destinations.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/11/07/the-surge-2/