The Canadian economy added 12,000 jobs in August, but the unemployment rate ticked up to seven per cent as 40,000 more people were looking for work.

Prior to August, the unemployment rate had been steady since January, at 6.8 per cent.

Over the past 12 months, Canada's economy has added 193,000 jobs, Statistics Canada said in a release Friday.

August's gain comes after a smaller one in July, which together represent the first back-to-back months of job gains since the price of oil started to crater last fall, Bank of Montreal noted.

'Canada's employment backdrop simply refuses to follow the recession script' - Doug Porter, BMO economist 

A consensus of economists polled by Bloomberg ahead of the data's release had been expecting a loss of about 5,000 jobs for the month.

Most of the jobs were full time, as the data agency said the economy added 54,400 full-time jobs. That figure was slightly offset by a drop of 42,400 part-time positions.

But the news is not all good. A large chunk of the job gains came from the public sector, but economists say in a healthy growing economy, the private sector should be doing the heavy lifting.

"While the full-time hiring tally is encouraging, job gains were again concentrated in the public sector [up 27,000] while private sector hiring was more modest [up 6,000]," TD bank economist Leslie Preston said. Self-employment was down by 22,000 jobs, Preston noted.

CANADIAN UNEMPLOYMENT IN AUGUST

And the number of jobs didn't increase steadily across the country.

Gains were concentrated in Saskatchewan, Newfoundland and Labrador, Manitoba and New Brunswick. There was little change in the other provinces.

Nor was it evenly distributed by industry.

In construction and manufacturing, there were fewer jobs during the month. Natural resources and education, meanwhile, experienced an increase.

Turnaround story?

The uptick in jobs comes on the heels of gross domestic product data earlier this week that showed Canada's economy contracted for the first two quarters of the year — a benchmark that many economists consider to be a sign of a recession.

But  buried in the bleak GDP number was the fact the economy expanded in June for the first time in five months.

Friday's jobs number for August is good news for those championing the narrative that Canada's economy is slowly recovering after having slowed down for the first half of 2015.

"Canada has created 195,000 jobs since oil prices began tanking in the summer of 2014 and 115,000 jobs since the start of this year, and some curiously still call that a recession," Scotiabank said. "That's absolute nonsense."

The Bank of Canada has cut its key interest rate twice this year in an effort to provide a cushion for the economy, which has been hit hard by the slump in oil prices that began around this time last year.

"While no ball of fire, Canada's employment backdrop simply refuses to follow the recession script," Bank of Montreal's Doug Porter said.

Corrections

  • A previous version of this story incorrectly reported that 52,000 more people were looking for work in August. In fact, only 40,000 more people were, but the labour force (which includes people with jobs and job seekers) increased by 52,000.
    Sep 04, 2015 11:25 AM ET