Canada added 12,000 jobs in August

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

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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 added193,000 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 added54,400 full-time jobs. That figure was slightly offset bya drop of 42,400 part-time positions.

But the news is not all good. A large chunk of the job gains came fromthe public sector, but economists say in a healthy growing economy, the private sector should bedoing 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 22,000jobs, Preston noted.

And the number of jobs didn't increase steadilyacross the country.

Gains were concentratedin 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 werefewer jobs during the month. Natural resources and education, meanwhile, experiencedan increase.

Turnaround story?

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

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,andsome curiouslystill 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 timelast year.

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