OTTAWA - North America's labour markets ended 2009 with a whimper, closing the books on a year of massive job losses with a status quo December that economists say nonetheless presages better times.

Both Canada and the United States disappointed expectations for the last month of the year, with Canada shedding a statistically insignificant 2,600 jobs and the U.S. a bigger 85,000.

The unemployment rate remained unchanged in both countries -- 8.5 per cent in Canada and 10 per cent in the U.S. -- and economists say the data show sustained employment gains are just around the corner.

In Canada, employment is down 323,000 from the peak of October 2008, with 240,000 of those losses in the past year and the vast majority in Ontario's battered manufacturing sector.

The biggest disappointment was that Canada's economy failed to deliver on the promise of sustained gains that many had thought likely following November's teasing 79,000 pickup.

The consensus had expected a 20,000 gain and that the U.S. would have stopped shedding jobs.

Looking on the bright side, economist Douglas Porter says the stabilizing of the job market in Canada means that the unemployment rate likely hit its recessionary peak at 8.7 per cent in August.

"Compared to past recessions, 8.7 per cent is almost a flesh wound," he said. "In the early '80s and early '90s, we got well into double-digits."

Even in the U.S., which lost more than seven million jobs during the recession, there was a silver lining to the report. The Labour Department revised November's numbers into a slight positive.

Scotia Capital economists Derek Holt and Karen Cordes also cautioned against reading too much into December's minor setback, both in Canada and the U.S.

In notes to clients, they said that with growth returning to both economies, sustained job growth will become evident as numbers for 2010 come in.

"Jobs are poised to grow in 2010," they predicted. "As U.S. supply chains heal and start adding jobs, the trickle over across the border into Canada will lead to job gains through seamlessly integrated cross-border production. Fiscal stimulus is also likely to begin raising Canadian and U.S. jobs."

Holt is calling for an employment gain of 300,000 in Canada this year and 2.8 million in the U.S.

But Porter said Canadians shouldn't expect straight-line growth in employment and that monthly setbacks will likely keep occurring.

The markets on both sides of the border barely reacted to the releases, an indication that investors saw the results as a saw-off. Even with December's minor setback, economists noted that taking the last three months of 2009 as a whole, the Canadian economy added 33,000 positions.

"This improvement in the labour market jibes with our forecast for real GDP (gross domestic product) growth of 3.4 per cent annualized in the final quarter of 2009," said Dawn Desjardins, assistant chief economist with the Royal Bank.

December's Statistics Canada report contained some good news.

Overall hours worked have increased by 2.2 per cent since April and more recently full-time employment has also begun to tick up.

By industry, the data showed several offsetting trends that kept the number of employed from changing significantly.

The public sector, which had been the engine of job growth through much of the recession, dropped 22,100 workers during the month.

As well, there were 24,000 fewer jobs in transportation and warehousing, while business, building and other support services saw a decrease of 23,000.

Offsetting the losses were gains of 35,000 in health care and social assistance, and 33,000 in professional, scientific and technical services.