04:22 PM EST, 12/05/2025 (MT Newswires) -- The Toronto Stock Exchange closed lower for a second straight day Friday as stronger-than-expected employment gains last month firmed expectations that the Bank of Canada will pause interest-rate cuts when it meets next week.

The S&P/TSX Composite Index fell 166.16 points to 31,311.41, remaining below Wednesday's record close of 31,477.57.

Statistics Canada's November Labour Force Survey showed an unexpected increase of 54,000 jobs, compared with a consensus estimate for a decline of 2,500 positions.

"Several jaws dropped this morning when the labour market data came out ... The picture painted by the LFS was not only spectacular in November, it also builds on solid performances over the previous two months. Over three months, the labour market added 180K jobs (a cumulative surprise of 183K compared to consensus expectations). If we exclude the post-pandemic data (reopening of the economy and strong population growth), such a sequence in the Canadian job market had only been seen in 2002. As a result, the unemployment rate has fallen sharply from 7.1% to 6.5% thanks to a spectacular surge in part-time jobs that has benefited young people," National Bank Financial wrote.

However, the positive job numbers may convince the Bank of Canada to hold off on another interest-rate cut when it meets on Wednesday. Some recent data, including a strong rise in third-quarter gross domestic product, show the economy is holding up well despite the Trump administration's tariff battles, though other reports have been more mixed.

"We expect a clear hold at 2.25% from the BoC at the final meeting of the year next week. The October cut was accompanied by clear conditional pause language that made another cut unlikely at subsequent meetings. Until today, data had not given a clear lean either way, with mixed results across labour market, output and inflation readings in the inter-meeting period. Today's jobs report (third straight gain >50K, unemployment rate down to 6.5%) does leave a hawkish tilt from the data, though the underlying details were not as strong," said Simon Deeley, Canada Rates Strategist at RBC Dominion.

Also on Friday Prime Minister Mark Carney shared a stage with U.S. President Donald Trump and Mexican President Claudia Sheinbaum for the draw for the upcoming FIFA World Cup, which will be shared between the three countries. Reports said Trump planned to discuss trade issues in meetings following the event, but no official notice of any talks was given.