Canadian employers shed 2,600 jobs in December, after creating positions in three out of the four past months, suggesting a sustained rebound in the labour market will lag the broader economic recovery.
The jobless rate remained at 8.5 per cent last month, Statistics Canada said Friday, near its highest level in 11 years.
In the last nine months, the labour market has stabilized, but it remains 323,000 jobs below the peak hit in October 2008. Last month's job losses came after employers created 79,100 jobs in November.
"While a tad disappointing, today's jobs report hardly represents a serious challenge to the recovery picture," said BMO Nesbitt Burns deputy chief economist Douglas Porter. "Still, it does show that the recovery will be uneven, with overall growth likely to pale compared with past recoveries."
In the U.S., 85,000 jobs evaporated in December, confounding expectations of zero change, showing the country's labour market continues to struggle. About 7.2 million jobs have disappeared in the U.S. recession, and the jobless rate remains at 10 per cent.
Canada's labour picture has been choppy in recent months, and a recovery is likely to be slow as employers remain cautious. Smoothing out the data shows the jobs market has added about 20,000 net new positions over the past five months, noted Avery Shenfeld, chief economist of CIBC World Markets Inc.
"If, as we expect, employment gains continue to average only 20,000 jobs per month, the unemployment rate will barely creep downward over the course of 2010," he said.
Losses in transportation and public administration offset gains in health care and social assistance. Self-employment continued to grow, and employment among women aged 25 to 54 tumbled by 24,000. Youth joblessness continued to swell, hitting 16.1 per cent from 15.9 per cent a month earlier.
In Canada, employment rose in Alberta last month, while it declined in Manitoba and New Brunswick. "In recent months, employment in Quebec, Ontario and British Columbia has been on a slight upward trend," the agency said.
People are working longer hours as economic activity picks up. Hours worked have increased 2.2 per cent since April.
Among sectors, transportation and warehousing last month lost 24,000 jobs, and business, building and other support services posted losses of 23,000. Public administration shed 22,000 positions and finance, insurance, real estate and leasing cut 17,000 jobs in December. Factories also shed jobs.
Employment continued to climb in health care and social assistance, with 35,000 new jobs. This segment is one of the few to post growth since the recession began.
Last month also saw gains in professional, scientific and technical services, with 33,000 jobs created. Construction and trade also added to payrolls.
The public sector shed 22,000 jobs in the month while self-employment rose by 15,000. The private sector was little changed with 4,000 new jobs.
Economists polled by Bloomberg had expected Canada created 20,000 new jobs in December.
Tavia Grant