Canada's economy shed jobs for the first time in five months as the country's unemployment rate rose to 7.3 percent from 7.2 percent in July, a statistical agency said Friday.
Statistics Canada said the net loss of employment was 5,500 jobs in August _ the second consecutive month there had been little growth.
Economists at some Canadian banks were expecting overall job growth to pick up, but the loss of more than 31,000 part-time jobs overwhelmed the addition of 25,700 full-time positions.
The private sector lost 20,600 positions while public-sector employment rose by 22,000.
The Canadian dollar took an immediate hit following the jobs report, dropping about half a cent to below $1.01 U.S.
The poor result follows a flat reading that also occurred in the U.S. last month, although Canada's unemployment rate remains about two percentage points lower.
Economists said Canadians should prepare for a tough jobs market going forward.
A statement from Scotiabank economists said the new data "further calls into question the Bank of Canada's (second half of year) optimism as the effects of a global confidence shock work their way through the economic variables."
TD Bank's Derek Burleton noted that the jobs number was not as bleak as the bottom line would suggest, since all the losses were part-time work.
Still Canadians should prepare for the unemployment rate to start edging up, he said, predicting the rate could reach 7.5 percent or higher by the end of the year.
Meanwhile, there were significant losses in the key goods producing sectors. Construction fell by 24,000, transportation and warehousing declined by 14,000 and the natural resource industries shed 12,000 workers. Students had a hard time all summer with an unemployment rate of 17.2 percent, well above the 14 percent level that existed prior to the recession.
But there was a big pickup in the health care and social assistance sector, which gained 50,000 jobs.
Thanks to robust results in the early part of 2011 when the economy was stronger, Canada has managed to create 193,000 jobs this year, the agency said. Over the past 12 months, 223,000 jobs have been added.
"Over this period, full-time employment increased by 2.2 percent (300,000 jobs), part-time work declined 2.3 percent (77,000 jobs), and total actual hours worked rose by 2.6 percent," reported Statistics Canada.
Earlier this week, Bank of Canada governor Mark Carney warned that the second half of 2011 would be weaker than previously predicted and that the export sector would face difficulties in foreign markets due to decreased demand and the high dollar.