Canada's unemployment rate remained unchanged at 8.5 per cent in December, Statistics Canada reported Friday.

The economy lost a few jobs in the month -- about 2,600 -- which disappointed economists who had generally expected a gain of 20,000 jobs.

It was also well below the 79,000 jobs the economy gained back in November. Still, the job losses were insignificant enough not to budge the jobless rate from its previous month's position.

The December data brought an end to a year in which 240,000 net jobs were lost across the country, mostly in the beleaguered manufacturing sector. From its peak of October 2008, employment is now down 323,000 jobs.

While the job losses have been significant, StatsCan says that in the last nine months, the jobless picture has largely stabilized.

"While employment in December was virtually unchanged compared with the spring of 2009, hours worked have increased 2.2 per cent since April," the agency noted. "More recently, full-time employment has also begun an upward trend, although it was unchanged in December."

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

"While a tad disappointing, today's jobs report hardly represents a serious challenge to the recovery picture," BMO economist Douglas Porter said in a note to clients.

"Still, it does show that the recovery will be uneven, with overall growth likely to pale compared with past recoveries."

Dawn Desjardins, assistant chief economist with RBC, suggested that the unemployment rate would remain high for a while yet.

"Even though economic activity has picked up pace, the amount of slack generated during the recession will take some time to wear away and as a result, the unemployment rate will remain elevated in the near term," Desjardins wrote in a daily economic update.

The December figures show several changes among different sectors of the labour market that offset one another to keep the jobless number steady.

"Employment rose in health care and social assistance, as well as in professional, scientific and technical services," Statistics Canada said.

But there were major declines in transportation and warehousing; business, building and other support services; and public administration.

Employment for women aged 25 to 54 declined by 24,000 in December, yet these losses were largely offset by small gains among men and workers older than 55.

December saw a decrease of about 22,000 jobs in the public sector, which had been fuelling a lot of the growth through the last year. The number of private sector employees was unchanged. The number of self-employed Canadians rose in December, by 15,200, suggesting many have given up on the labour market to go into business for themselves.

Meanwhile in the U.S., the picture was somewhat bleaker.

The Labor Department reported Friday that the American economy lost 85,000 jobs during December, even though economists had expected a flat showing. The unemployment rate held steady at 10 per cent, but there was also sharp drop in the labour force -- a sign that many of the jobless gave up looking for work.

Here's what happened provincially (previous month in brackets):

  • Newfoundland 15.7 (15.9)
  • Prince Edward Island 10.7 (11.7)
  • Nova Scotia 9.6 (9.5)
  • New Brunswick 8.9 (8.8)
  • Quebec 8.4 (8.1)
  • Ontario 9.3 (9.3)
  • Manitoba 5.7 (5.3)
  • Saskatchewan 4.8 (5.2)
  • Alberta 6.7 (7.4)
  • British Columbia 8.4 (8.3)