UPDATE 1-Canada gains surprise 35,200 jobs in December, unemployment rate falls to 5.6%

Kelsey Johnson

falls to 5.6%@ (Adds detail)

OTTAWA, Jan 10 (Reuters) - The Canadian job market gained a higher-than-expected 35,200 net jobs in December, entirely in full-time positions, while the unemployment rate fell to 5.6%, official data showed on Friday.

Analysts in a Reuters poll had forecast a gain of 25,000 jobs in December and an unemployment rate of 5.8%. Wages for permanent employees rose by 3.8%, Statistics Canada said, lower than the 4.4% gain seen in each of the previous two months.

The national participation rate edged down to 65.5% from the 65.6% seen in November, Statscan reported. Canada's two biggest provinces, Ontario and Quebec, led the employment gains.

Canada shed an unexpected 71,200 net jobs in November, the biggest decline since 2009, while the national unemployment rate rose to 5.9%.

Full-time employment, Statistics Canada said on Friday, increased by 38,400 net positions, while part-time employment dropped by 3,200.

Meanwhile, Canada's goods-producing industries gained 15,700 net jobs, mainly in construction. The services sector saw an increase of 19,400 net positions, largely in accommodation and food services.

The Bank of Canada has held its overnight interest rate steady since October 2018 even as several of its counterparts, including the U.S. Federal Reserve, have eased. The central bank's next interest rate decision is set for Jan 22. Addressing a business audience on Thursday in Vancouver, Bank of Canada Governor Stephen Poloz said the central bank would be watching to see if the recent slowdown in job creation persisted.

He noted the most recent economic data had been mixed, telling reporters the fourth quarter had seen some unusual weather and strikes.

(Reporting by Kelsey Johnson, Editing by Dale Smith and Steve Orlofsky)

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