TORONTO -- The Canadian economy created 40,000 full-time jobs in December, driving the unemployment rate to its lowest in four years, Statistics Canada said Friday.
The federal reporting agency said the unemployment rate slipped by one-tenth of a percentage point to 7.1 percent.
The results easily topped economist estimates for a gain of just 5,000 jobs nationally and an unemployment rate of 7.3 percent.
The better-than-expected December results follow what was a strong November, when Canada's economy created 59,300 jobs.
"Canadian employment not only defied expectations in December, it also appears to be defying gravity," said Doug Porter, the Bank of Montreal's deputy chief economist.
"The Canadian labor market finished 2012 in fine fashion, posting solid job gains in four of the last five months and driving the jobless rate to its lowest ebb in four years."
December saw 41,200 new full-time jobs added, while the number of part-time positions fell by 1,400.
Compared with a year earlier, Statistics Canada said there were 312,000 more jobs, all in full-time work.
Ontario led the way with a gain of 33,000 jobs in December, following a similar increase in November. Most of the other provinces posted gains or were little changed for the month.
The gains were made in the transportation and warehousing segment which added 22,000 jobs, while the construction industry gained 18,000 jobs.
Professional, scientific and technical services lost 42,000, while public administration dropped 13,000.
The new jobs were added in a month of much hand-wringing over the U.S. fiscal cliff and worries that if a budget deal was not reached Canada's largest trading partner could be tipped back into recession.
A last-minute deal this week has prevented taxes from rising on the middle class and the poor. However, U.S. lawmakers still must wrangle over spending cuts and raising the country's debt ceiling.