NEWS

Canada loses 26,000 full-time jobs

01/06/2012 10:13 EST | Updated 03/07/2012 05:12 EST

An increase in part-time work offset a loss of 26,000 full-time jobs in Canada in December — but it wasn't enough to stop the unemployment rate from ticking higher to 7.5 per cent.

Statistics Canada said the unemployment rate climbed by 0.1 percentage points despite the increase of 18,000 jobs because more Canadians were looking for work than in November.

After a strong start last year, Canada has now recorded six months without significant job gains. Official data shows the Canadian economy has added 199,000 jobs in 2011, but almost all of that growth came in the first six months.

The U.S. economy created more than 199,000 jobs in December alone, U.S. government data showed Friday. And in 2010 as a whole, the Canadian economy created 298,000 jobs.

"As has been the case throughout this recession and recovery, the job gains have been concentrated decidedly among older workers," Toronto-Dominion Bank economist Francis Fong noted.

"Those aged 55 years and over recorded gains of 24,000 in December, while positions open to those aged 15-24 fell by 16,800. The unemployment rate for younger workers remained steady at 14.1 per cent, almost double the national average."

The slight jobs gain was at least better than the 73,000 jobs lost in the months of October and November combined, but overall there was little to cheer about in the first major economic report card of 2012.

"However, neither the gain nor the underlying details would suggest any reversal of fortune for the Canadian economy," Fong said.

The agency noted that all the gains were in the weaker categories of part-time and self-employment, whereas full-time work fell by 25,500 jobs and the number of employees in the country declined by 13,600 in December.

The losses were offset by gains of 43,100 part-time jobs and 31,100 in self-employment.

Regional strength

In an anomaly, every province in Canada saw a slight increase in employment except Quebec, where big losses in the construction and health-care and social assistance sectors contributed to a decline of 25,700 jobs.

Alberta also has the lowest unemployment rate in the country, at 4.9 per cent. About half of the new jobs created in Canada last year were in Alberta.

The December labour market report does little to change the overall picture of an economy that is struggling to create sufficient employment to keep up with growth in the population and new entrants.

Economists speculate that the uncertainty in the global economy, particularly concerns that Europe may not be able to contain its sovereign debt crisis, is keeping employers on the sidelines.

As well, Canada now faces some structural weaknesses, such as high household debt and a slowing housing market.

In December, manufacturing accounted for all and more of the jobs increase, adding 30,400 workers, while construction saw a drop of 12,000. "The good news was that manufacturing was up 30,000, as the sector had shed almost 80,000 jobs in the prior three months alone," BMO economist Douglas Porter noted.

For the year, however, the factory sector remains in the hole by 50,000 jobs.

The service sector was responsible for almost all of the jobs created in 2011 as a whole, as employment rose significantly in the accommodation and food services industries, and professional, scientific and technical services.

Meanwhile, overall employment in the goods producing sector was flat with gains in natural resources and construction cancelled out by declines in utilities and manufacturing.

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