The Canadian economy’s job creating ability stalled in February, as 21,200 jobs disappeared and the jobless rate stayed at 7.4%.

Economists had forecast an increase of at least 15,000 jobs.

Statistics Canada said the number of part-time jobs fell by 32,500, more than offsetting the 11,400 rise in the number of full-time positions.

Job losses were concentrated in the health care and social assistance fields. Twelve thousand factory jobs vanished. Construction hiring was also weak.

There was strength in education and transportation, and hiring in the public sector continued to grow at a much higher rate than the private sector. StatsCana said 24,000 more public sector workers were added to payrolls in February.

Since last August, public sector jobs have grown by 3.1%, while private sector employment has risen 1.1%.

British Columbia recorded the only notable employment loss among the provinces, shedding 36,000 jobs — especially in retail trade. The jobless rate in B.C. jumped 0.6 percentage points to 7.9%.

“After a string of surprisingly robust job gains, Canada’s labour market has finally come tumbling back down to earth,” says TD Bank. The February report wipes out the previous month’s gains, “leaving 2004 with a rather shaky start on the employment front”.

“And, there was little to cheer about in the details of the report either,” TD says, noting that declines came in the private sector and self employment, only government hiring showed any resistance.

RBC Financial saw some good news in the report, noting that Feburary was the sixth consecutive month in which full-time employment increased. “Canadian employers are converting their payrolls away from part-time employment to more stable and better paying full-time jobs,” it says. “This has been an ongoing feature of Canadian labour markets since last September with full-time employment growth outpacing part-time employment for six straight months..”

As for how the Bank of Canada will react to the report, TD says that, “Although the Bank of Canada’s decision on April 13th is still nowhere near a done deal, this morning’s employment report certainly puts another tick mark in the easing column,” says TD.