January 8, 2016 / 1:41 PM / 3 years ago

Canada adds jobs in December, analysts see underlying weakness

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.

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

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.

The oil price crash has slammed the western energy-producing province of Alberta, which lost 3,900 jobs in December. The jobless rate in the province is now 7.0 percent compared to 4.7 percent in December 2014.

Further east, the populous provinces of Ontario and Quebec posted gains of 34,900 and 12,700 positions respectively.

For 2015, employment gains totaled 158,100, or 0.9 percent, slightly above the 0.7 percent year-on-year growth rate seen in both 2013 and 2014.

The six-month moving average for employment growth was 10,500, up from 10,400 in November.

Separately, Statscan said the value of Canadian building permits issued in November fell 19.6 percent on widespread declines in Alberta, which had seen a boom in October.

Additional reporting by Matt Scuffham, Susan Taylor and Fergal Smith in Toronto; Editing by Bernadette Baum and Meredith Mazzilli

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