The common refrain following the release of disappointing economic data is that “one month does not a trend make.” But given the dismal job numbers reported by both Canada and the US today, that’s hardly a comforting insight.

According to Statistics Canada (StatsCan), the Canadian economy lost 45,900 jobs in December, which was a far cry from economists’ consensus forecast that the economy would add 14,100 jobs. That caused the unemployment rate to jump three-tenths of a percentage point, to 7.2 percent, while the labor force participation rate held steady at 66.4 percent.

Previously, the unemployment rate had been on a modest downward trend since July, falling to 6.9 percent, a five-year low, where it had remained for three straight months prior to the latest number. For context, over the trailing three-year period, the monthly unemployment rate has averaged 7.3 percent. Meanwhile, the labor force participation rate is at a 10-year low.

December’s numbers dragged results for full-year 2013 lower, with the economy adding 102,000 jobs, for growth of just 0.6 percent year over year, the slowest pace since 2009. By contrast, the economy added nearly 311,000 jobs in 2012.

The underlying data were even worse, if possible, as results were driven by a loss of 60,000 full-time positions, while part-time employment rose by 14,200 jobs. Full-time jobs are considered to be of higher quality, in part because they pay more, so it’s important to monitor trends in this area. Over the past year, there have been other equally dramatic results in this category, with the loss of 54,000 full-time jobs in March that was soon followed by the creation of nearly 77,000 new full-time jobs in May.

Since month-to-month employment data are notoriously volatile, particularly for Canada, it makes sense to review these numbers over longer-term periods. While the economy added 15,800 jobs per month over the trailing three-year period, there was only an average of 1,600 full-time positions created each month during 2013. Even with this fuller context, there’s still a marked deceleration, though we remain hopeful that the past year was a trough for the economy.

These dismal results, along with November trade data that fell well short of expectations, drove the Canadian dollar to its lowest level since late 2009. The loonie currently trades near USD0.918, down about 13.4 percent since its all-time high back in mid-2011.

Of course, this is the year that the strength of a resurgent US economy is supposed to flow through to the Canadian economy. In fact, Canadian policymakers are counting on a rebound in the US to help the country’s economy transition from its dependence on debt-burdened consumers to exports and business investment. To that end, a falling loonie is certainly helpful, as it makes Canadian goods more competitive in other markets. More important, however, is the fact that the US is Canada’s largest trading partner, absorbing about three-quarters of the country’s exports in October, for instance.

However, Bank of Canada Governor Stephen Poloz has cautioned that an improving US economy may not be sufficient to drive Canadian exports as it’s done in the past. That linkage has been undermined by what Mr. Poloz describes as a “wedge,” and he and his fellow central bankers are still puzzling over it.

Part of the problem is the fact that the period since the global downturn has been more akin to a post-war recovery than a typical recovery following a recession. And Canadian exporters, in particular, suffered mightily during the Global Financial Crisis, with many firms going out of business, while the sector as a whole remains in a deep slump.

Still, we’re betting that Mr. Poloz would rejoice if the US economy manages to sustain its recent momentum. In the short term, however, it’s hard to ignore the fact that the US posted disappointing jobs numbers for December itself.

The US Bureau of Labor Statistics reported that December nonfarm payrolls grew by just 74,000 jobs, well below the consensus forecast of 197,000 jobs, according to Bloomberg’s survey of economists. Over the past year, employment growth has averaged 182,000 jobs per month, somewhat better than the average of nearly 178,000 jobs per month created over the trailing three-year period.

The unemployment rate declined a substantial three-tenths of a percentage point, to 6.7 percent, which is just two-tenths of a percentage point above the threshold that the US Federal Reserve has said would cause it to start considering monetary tightening.

However, the drop in the unemployment rate was driven by a fall in the labor force participation rate, which decreased by two-tenths of a percentage point, to 62.8 percent, matching the October figure, which itself was a 35-year low. That’s caused some cynics to redeploy the quip that if we can only convince more of the unemployed to stop looking for work, then the unemployment rate will decline even further.

To be sure, demographics partially explain why the participation rate has yet to recover to pre-recession levels, as aging baby boomers exit the work force. But economists with CIBC World Markets say recent declines in the participation rate have gone much further than could be explained by demographics alone.

In the big picture, these latest data could well prove to be a statistical blip. But it’s not the most reassuring portent for the new year.

Bay Street Beat

We’re now in the relatively quiet period between the end of the calendar fourth quarter and when companies being their rapid clip of earnings releases. As such, there have been relatively few changes in analyst sentiment since last month’s issue.

In the wake of Bank of Nova Scotia’s (TSX: BNS, NYSE: BNS) results for its fiscal fourth quarter (ended Oct. 31), which we reported on last month, analyst sentiment now stands at eight “buys,” eight “holds,” and one “sell.” EVA Dimensions boosted its rating from “underweight,” or “sell,” to “hold,” while RBC Capital Markets initiated coverage with an “outperform” rating, or “buy.”

The consensus 12-month target price declined to CAD63.80 from CAD66.52. The new target suggests a potential return of 8 percent above the current share price.

TD Securities lowered its rating for Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF) to “hold” from “buy,” though it maintained its 12-month target price at CAD11.00. The mix of analyst sentiment now stands at four “buys,” five “holds,” and one “sell,” while the consensus 12-month target price remains unchanged, at CAD10.43, or just 0.3 percent above the current share price.

Although the mix of analyst sentiment for Keyera Corp (TSX: KEY, OTC: KEYUF) remains the same as last month, two analysts essentially swapped outlooks. Macquarie downgraded the stock to “neutral,” or “hold,” from “outperform,” or “buy,” though it did raise its 12-month target price to CAD68.00 from CAD66.00.

And FirstEnergy Capital Corp boosted its rating to “outperform,” or “buy,” from “market perform,” or “hold.” It also increased its 12-month target price to CAD70.00 from CAD64.00.

The consensus 12-month target price rose to CAD65.90 from CAD64.55. The new target is actually 0.1 percent below the current share price.

Since last month’s issue, one brokerage apparently lowered its rating to “hold” for TransForce Inc (TSX: TFI, OTC: TFIFF), though curiously Bloomberg’s data does not show which firm was responsible for the downgrade.

The mix of analyst sentiment now stands at eight “buys,” three “holds,” and no “sells.” However, the consensus 12-month target price actually improved, rising to CAD26.65 from CAD25.39, suggesting a potential return of 9.5 percent above the current share price.

Since adding Magna International Inc (TSX: MG, NYSE: MGA) to our Aggressive Holdings in last month’s issue, EVA Dimensions raised its rating to “buy” from “overweight,” which is also treated as equivalent to a “buy” for sentiment purposes. Additionally, Scotia Capital initiated coverage with a “focus stock” rating, which is treated as equivalent to a “buy.”

The mix of analyst sentiment now stands at 11 “buys,” six “holds,” and three “sells.” The 12-month target price is CAD97.75, suggesting a potential return of 8.3 percent above the current share price.

In the listing below, the number of analyst “buy,” “hold” and “sell” ratings for each company are shown, followed by the average 12-month target price among the analysts for which we have access to such data.

Month-over-month variances in the number of analysts listed below for each stock are often due to those securities being on a brokerage’s restricted list for a brief period. A restricted list is a compliance measure that’s typically used during the period when the investment banking side of an analyst’s firm is involved in advising the company.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–5–3–1 (CAD42.14)
• Artis REIT (TSX: AX-U, OTC: ARESF)–7–3–0 (CAD16.76)
• Bank of Nova Scotia (TSX: BNS, NYSE: BNS)–8–8–1 (CAD63.80)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–3–4–0 (CAD12.92)
• Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF)–0–1–0 (CAD14.50)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, NYSE: BEP)–9–2–1 (CAD31.69)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–10–2–0 (CAD24.76)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–5–7–1 (CAD42.80)
• Davis + Henderson Corp (TSX: DH, OTC: DHIFF)–3–4–1 (CAD29.64)
• Dundee REIT (TSX: D-U, OTC: DRETF)–4–2–0 (CAD33.81)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–5–2–0 (CAD11.00)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–4–5–1 (CAD10.43)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–5–6–0 (CAD65.90)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–6–3–1 (CAD30.19)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–8–3–1 (CAD37.27)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–5–5–0 (CAD28.38)
• Shaw Communications Inc (TSX: SJR/B, NYSE: SJR)–5–11–3 (CAD25.19)
• Student Transportation Inc (TSX: STB, NSDQ: STB)–2–3–1 (CAD7.32)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–8–3–0 (CAD26.65)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–0–1–1 (CAD12.50)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–8–2–1 (CAD45.38)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–12–7–1 (CAD31.43)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–2–2–0 (CAD21.00)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–22–1–1 (CAD46.79)
• Enerplus Corp (TSX: ERF, NYSE: ERF)–14–4–0 (CAD22.50)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–0–3–2 (CAD6.94)
• Lightstream Resources Ltd (TSX: LTS, OTC: PBKEF)–1–17–1 (CAD6.81)
• Magna International Inc (TSX: MG, NYSE: MGA)–11–6–3 (CAD97.75)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–9–2–1 (CAD18.98)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–1–0–0 (CAD7.00)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–6–4–0 (CAD20.03)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–14–4–2 (CAD35.84)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–13–6–1 (CAD63.79)
• Wajax Corp (TSX: WJX, OTC: WJXFF)–3–7–0 (CAD36.72)