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Canadian Job Growth Falters In December

Job creation stalled last month, disappointing hopes for a sustained period of Canadian employment gains that would contribute to future growth of the economy.

OTTAWA (CP) -- Job creation stalled in December, disappointing hopes for a sustained period of employment gains that would contribute to future growth of Canada's recession-battered economy, which shed more than 300,000 jobs last year.

Overall, there were 2,600 fewer Canadians employed in December, below economists' consensus of a 20,000 additional jobs and far below November's eye-popping 79,000 increase.

Statistics Canada said the job loss last month was too small to change the unemployment rate from November's 8.5 per cent.

The U.S. Labour department had similar news, saying the U.S. economy lost more jobs than expected in December but not enough to change the unemployment rate from 10 per cent.

Economists chose to see the bright side of the mild setback, noting that taking the last three months as a whole, the Canadian economy added 33,000 positions.

"This improvement in the labour market jives with our forecast for real GDP (gross domestic product) growth of 3.4 per cent annualized in the final quarter of 2009," said Dawn Desjardins, assistant chief economist with the Royal Bank.

Scotiabank's Derek Holt, who this week went against the grain by forecasting a 20,000-job contraction to offset November's large gain, also said markets should look beyond the monthly blip.

"Jobs are poised to grow in 2010," he said in a note. "As U.S. supply chains heal and start adding jobs, the trickle over across the border into Canada will lead to job gains through seamlessly integrated cross-border production. Fiscal stimulus is also likely to begin raising Canadian and U.S. jobs."

Holt said he was most concerned with the 15,200 addition in self-employment. He said that could be indication that there is still a lot of slack in the labour market and that people are creating low-paying jobs for themselves because they can't find regular employment.

The December data closed the books on a painful year for Canadians, in which the economy likely fell back by 2.5 per cent and shed a total of 323,000 net jobs, mostly in the battered manufacturing sector.

But there was also some encouraging news, the government agency said.

After suffering massive losses last fall and spring, Canada's labour market has largely stabilized and there were signs of improvement, particularly in the construction sector. That sector is up 30,000 jobs since March.

As well, overall hours worked have increased by 2.2 per cent since April and more recently full-time employment has also begun to tick up.

Average hourly wages rose 2.4 per cent in 2009, well below the 4.3 per cent pace of a year ago.

Economists have forecast that employment growth will become more sustained throughout 2010, with a total of 200,000 to 300,000 jobs created.

December's data shows several offsetting changes by industry that kept the number of employed from changing significantly.

The public sector, which had been the engine of job growth through much of the recession, dropped 22,100 workers during the month.

As well, there were 24,000 fewer jobs in transportation and warehousing, while business, building and other support services saw a decrease of 23,000.

Offsetting the losses were gains of 35,000 in health care and social assistance, and 33,000 in professional, scientific and technical services.

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