OTTAWA: Canada lost more jobs than expected in December, Statistics Canada data showed on Friday, as employment declined for the first time since April amid tighter restrictions aimed at curbing a harsh second wave of COVID-19 infections.

Canada lost 62,600 jobs, more than double analyst expectations of a decline of 27,500, while the unemployment rate edged up to 8.6%, in line with expectations. Employment remains 3.3% below pre-pandemic levels.

A number of regions across Canada have imposed harsher restrictions and lockdowns amid a surge in COVID-19 cases, with Canada's daily new case average now topping 7,688. That has analysts anticipating further job losses.

"Due to both the continuing rise in virus cases... and the further curtailments of activity since the last survey, another month of job losses could be on the horizon in January," said Royce Mendes, senior economist at CIBC Capital Markets, in a note.

Mendes added that the poor outlook for employment could put pressure on the Bank of Canada to further ease monetary policy. The central bank has said it could cut record low interest rates further if the economic situation worsens.

The Canadian dollar was little changed at 1.2681 per US dollar, or 78.86 US cents, after initially weakening after the data.

The service sector, which has been hit by fresh restrictions on retail, food services and fitness facilities, lost 74,000 jobs, while employment in the goods sector rose by 11,300.

"It's almost textbook, the decline was almost entirely in accommodation and food services which lost almost 57,000 jobs," said Doug Porter, chief economist at BMO Capital Markets.

He noted the overall decline was only a fraction of that in March and April, when broad national shutdowns led to more than 3 million job losses.

Part-time employment fell by 99,000 positions, while full-time employment fared better, up by 36,500 jobs, Friday's data showed.

Some 488,000 Canadians remained underemployed in December compared with before the pandemic, Statistics Canada said, with many not working any hours despite being employed.