Employment in Canada began rising again in December after declines the previous two months, but details in the latest jobs report pointed to an economy struggling to achieve lift, particularly in the country's two biggest provinces.

Statistics Canada said the economy created 17,500 jobs in December, slightly below expectations, with every province except Quebec registering gains.

The good news ended there, however, as all the gains were part-time and among the self-employed.

Employers actually shed 13,600 workers in December and full-time jobs fell even further, by 25,500.

Most troubling was that the unemployment rate rose for the third consecutive month to 7.5 per cent, the highest level since April, as more Canadians sought work in December.

"We've staunched the bleeding in terms of ending outright job losses, but if you step back and look at the three- or six-month trend, this is still a soft labour market in Canada," said Avery Shenfeld, chief economist with CIBC world Markets.

"The problem is we need stronger economic growth to generate the need to hire ... the economy can be described as mediocre."

Bank of Montreal economist Douglas Porter called it "highly unusual" for the unemployment rate to rise three consecutive months in the middle of what is supposed to be an economic expansion.

"I was happy to see a plus sign ... (but) I'm not completely relieved."

Markets also saw the report as a net negative, dropping the Canadian dollar about half a cent to 97.61 cents US in early trading.

Quebec was particularly hard hit last month, losing 25,700 jobs in addition to the combined 16,600 decline in October and November. Ontario saw a modest 15,700 increase but remains down over the past three months.

Analysts said the high Canadian dollar and soft world demand is partly responsible for the poor employment record in Central Canada in recent months since the region has a high level of factory jobs that depend on exports.

But Quebec's sharp retreat may have another origin, said Porter. He said the province was first out of the blocks with stimulus spending during the recession and first out during the recovery. As well, Quebec's sales tax increases may be depressing consumer spending.

"It partly explains why they've gone from being one of the real success stories on the labour market front to being one of the real weak spots," he said.

The good news in Friday's economic reports came from Washington, where the Labour Department calculated that the United States added 200,000 new jobs in December, dropping the unemployment there to 8.5 per cent, the lowest in almost three years.

A recovery in the U.S. would be welcomed by Canada's battered manufacturers and exporters since about 70 per cent of Canadian shipments head south of the border.

The December labour market report does little to change the overall picture of an economy struggling to create sufficient employment to keep up with growth in the population and new entrants.

After a strong start of the year, Canada has now gone six months without any significant job gains. Statistics Canada said of the 199,000 jobs created in 2011, almost all came in the first six months.

In December, manufacturing accounted for all and more of the jobs increase, adding 30,400 workers, while construction saw a drop of 12,000. For the year, however, the factory sector remains in the hole by 50,000 jobs.

The services sector has been responsible for almost all the job gains for the year as a whole, as employment rose significantly in the accommodation and food services industries, along with professional, scientific and technical services, the agency said.

Meanwhile, overall employment in the goods-producing sector was flat with gains in natural resources and construction cancelled out by declines in utilities and manufacturing.