OTTAWA - Canada's economy showed signs of renewed life as the year closed out, adding 22,000 jobs in December with big gains in full-time, private-ector and youth employment.
Prime Minister Stephen Harper said the numbers were an "encouraging" signal..
"The trends are all moving in the right direction," Harper said.
"Obviously in the time of recession, you want to see any job created. As the economy picks up, obviously we want to see those jobs become full-time jobs, better jobs. We're seeing that trend."
Harper cautioned, however, that at 7.6 per cent, Canada's unemployment rate remains too high and that the recovery is fragile.
While the headline number was not particularly robust, analysts and markets looked through the top line to the considerable underlying strength of the report.
December's gain was the biggest in four months, and the composition of the gains was even more impressive, including an eye-popping spike of 66,000 jobs in the manufacturing sector.
Full-time jobs increased by 38,000, while part-time work declined and many involuntarily self-employed found regular work. Private sector jobs rose by 53,000.
There was a welcome surprise -- a big pickup of 26,000 in youth employment following a large decline in labour force participation from the 15-to-24-year-old group in November.
The overall result kept Canada's job creation pace ahead of the United States, which saw a disappointing 103,000 employees added during the month, although unemployment dropped to a post-recession low 9.4 per cent.
The loonie jumped 0.62 of a cent to 100.93 cents US on the news, although it gave back some of that gain later in the day.
"This is a solid report, with more strength than meets the eye. In particular, the huge gains in factory and transportation jobs provide a tantalizing hint that the upturn in the U.S. economy is spilling over into Canada," said Douglas Porter, deputy chief economist with BMO Capital Markets.
Several analysts added one caveat to the general endorsement, expressing skepticism that the battered factory sector did indeed manage to hammer out 66,000 new jobs last month, mostly in Ontario and Quebec.
CIBC economist Emanuella Enenajor, along with others, suggested next month's report may show a revision.
Still, analysts said both the Canadian and U.S. numbers bode well for the economy in 2011.
"Going forward, we see strong private-sector hiring to offset weaker public sector job gains," said Enenajor.
Expectations for the U.S. are also brighter, after a lacklustre year in which a mere 1.1 million jobs were created. By comparison, the 368,500 jobs added in Canada in 2010 is equivalent to about four million jobs in the U.S. when the relative sizes of the labour forces are taken into account.
But analysts noted the U.S.'s better results of late, along with improving manufacturing and retail sales data.
"We anticipate close to 2.7 million in job creation (in the United States) during 2011, which should bring the unemployment rate down to 9.1 per cent by year end -- and that would reflect a sustainable decline," said TD Bank's Alistair Bentley.
Economists view a rebound in the U.S., as essential for Canada's economic recovery since about three-quarters of Canadian exports head south of the border.
The better news shouldn't mask the fact that the global economy still faces considerable hurdles, noted economists, as did the prime minister.
Europe's debt worries, rising oil and food prices, and in Canada, the fallout on exports from a strong loonie continue to dog the economy.
As well, Liberal finance critic Scott Brison said Canada's commodity-driven recovery has the potential to create two separate economic realities in the country, with a resurgent West and a stagnant East.
"Any good news at any time, as Canadians, we welcome," Brison said. "But we also have to look at the Canadian economic situation clear-headedly and not through rose-coloured glasses."
There were, in fact, also some notable weaknesses in the December report from Ottawa. Construction saw a decline of 27,000 jobs, the wholesale and retail trade fell off by 22,000 workers and health care and social assistance fell by 24,000.
Regionally, besides Ontario's gains, Quebec saw a strong increase of 25,000 jobs, while in British Columbia, employment fell by 23,000.
The most recent employment numbers are unlikely to alter the Bank of Canada's thinking on interest rates when the governing council meets in a little over a week's time. Barring stronger economic growth, economists say the bank will likely stick to its one per cent policy rate until mid-year.
