OTTAWA–The deepening recession took another big bite out of Canada's labour market in December, sending 34,400 more workers into the ranks of the unemployed as the jobless rate jumped three-tenths of a point to 6.6 per cent.

Last month's job losses paled in comparison to November's oversized 71,000 contraction – those numbers skewed by the end of election-related jobs – but they also glossed over the fact that December saw the economy shed another 70,700 full-time employees.

Only the gain of 36,200 part-time jobs kept December from replicating the previous month's losses, which were the deepest since 1982.

"Canada has firmly lost its job market resilience," said Derek Holt, vice-president of economics at Scotia Capital.

"One hundred thousand jobs have been lost in only two months, which now almost fully reverses the large late summer employment gains, and puts Canadian job losses proportionately more in line with the U.S. experience. "

"The hit to pay will be worse than the body count, since 71,000 full-time jobs were lost while reduced hours drove a 36,000 gain in lower paying part-time employment," he added.

The December carnage was far worse than the consensus expectations of a 20,000 drop but several economists, including Holt, had been predicting greater losses.

As worrying for Canadians was that the private sector shed 59,400 jobs, partially offset by an additional 20,500 in government hiring.

For the year, Statistics Canada said the country managed to eke out a gain of 98,000 jobs, far fewer than the 358,000 gained in 2007 and all in part-time work.

Statistics Canada said manufacturing, forestry, building, information, culture and recreation, agriculture, fishing, mining, oil and gas, and trade were net employment losers in 2008.

Hourly wages remained relatively robust last month, showing a 4.3 per cent year-to-year increase, double the current inflation rate.

Wages remain highest in Alberta at an average $24.50 an hour, followed by Ontario and British Columbia at about $22.

But actual hours worked are declining, down four per cent for the last three months of 2008.

The December report presents a picture of an economy that hit the wall in the latter part of the year, with manufacturing, sales and construction activity taking a plunge in the face of the spiralling financial crisis.

"From the record low 5.8 per cent in early 2008, the unemployment rate climbed 0.8 percentage points by the end of the year, with most of the increase occurring in the last quarter," Statistics Canada noted.

CIBC economist Krishen Rangasamy said the trend is worrying, noting that over the past six months Canada has lost 36,000 net full-time jobs and 114,000 private sector jobs, pushing more people into the less-lucrative and not always voluntary self-employed and part-time categories.

And the first half of 2009 doesn't look to be any better.

"With economic contractions in the cars of the first half of 2009, expect the unemployment rate to head towards eight per cent," he said.

The latest sector to be hit by the economic tsunami was construction, which had previously seemed impervious to the recession.

In December, however, the construction industry lost 44,000 jobs as housing starts dipped to the lowest level in seven years the previous month.

"The sharp decline in construction employment reinforces the need for more public infrastructure investment," said labour economist Erin Weir of the United Steelworkers.

Also, with private capital drying up, Weir said the federal government should drop its requirement that projects receiving federal funds be organized as public-private partnerships.

Offsetting the losses were gains in transportation and warehousing, up 23,000, education services, public administration, and manufacturing, although the latter industry remains down for the year and has now lost 380,000 jobs since over the past seven years.

With the price of oil tumbling, Alberta's economy also showed signs of slowing and actually recorded the sharpest employment decline of any province last month with 16,000 fewer jobs, all full-time. That pushed the jobless rate in the province up 0.7 percentage points to 4.1 per cent.

Quebec also shed a large number of jobs in December, losing 9,400 overall with gains in part time employment offset by the loss of 48,700 full-time jobs.