Canada adds jobs in December, analysts see underlying weakness

Fri Jan 8, 2016 11:07am EST
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By David Ljunggren

OTTAWA (Reuters) - Canada added more jobs than expected in December, partly making up for heavy losses the previous month, while the unemployment rate held at 7.1 percent, welcome news for an economy hit by low oil prices.

Statistics Canada said on Friday the economy created 22,800 jobs in December, far more than the market forecast of a 10,000 gain, but in sign of possible underlying weakness analysts noted all the gains were in the part-time sector.

Derek Burleton, deputy chief economist at Toronto-Dominion bank, said the headline figure was a relief amid market gloom about slumping commodity prices and a stuttering economy.

"At the margin, it's reassuring. It's not a robust employment report but given all the negativity it might help to sooth some of the recent fears," he said.

The Canadian dollar initially held its own against a broadly stronger U.S. dollar, helped by solid jobs data in both nations. It later weakened to C$1.4132, or 70.76 U.S. cents, down from the official close of C$1.4097, or 70.94 U.S. cents.

The economy created 29,200 part-time jobs and lost 6,400 full-time positions in December. The number of employees dropped by 17,500 while the ranks of the self-employed grew by 40,300 positions.

"The details are not that great. All of the gain was in part time and all was in self employment, so not a great mix. We'll take any jobs we can get at this point, but it could be better," said Sal Guatieri, senior economist at BMO Capital Markets.

Bank of Canada Governor Stephen Poloz on Thursday said it could take the economy from three to five years to adjust to lower commodity prices.   Continued...

Motorized mannequins hold signs that read "Hire Me" in Toronto May 23, 2014.  REUTERS/Mark Blinch