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A construction worker sweeps snow from iron beams on a building site at Bay and Adelaide in Toronto Feb. 6, 2014.

CHRIS HELGREN/Reuters

More workers marched into self-employment and the public sector in January as the labour market returned to its months-long trend of modest job gains.

Employment rose by 29,400 jobs, recouping some of December's losses. The jobs gain, along with a drop in the number of people looking for work, lowered Canada's jobless rate to 7 per cent, the same level as a year ago.

Jobs numbers have see-sawed lately but the six-month average shows increases of about 15,000 a month. The services side of the economy continues to lead employment growth, while wage growth picked up last month, a good sign for household finances.

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"Jobs data, over all, remain consistent with an economy that is expanding at a moderate pace," said David Watt, chief economist at HSBC Bank Canada.

Details of Friday's Statistics Canada report were mixed. Full-time positions rebounded from a month-earlier decline, though over the past year part-time positions have increased 2.3 per cent, outstripping a 0.5-per-cent gain in full-time work.

Self-employment accounted for much of last month's job growth, increasing by 28,300. Small gains in public-sector employment offset a drop in the private sector, which has now shed jobs for two straight months.

Sahil Zaman is among those who have jumped into self-employment. He's a lawyer in Toronto but left the field last summer because he felt his former job, articling in mergers and acquisitions, wasn't for him.

The 28-year-old now develops cloud-based work-flow software for law firms. "I'm making much less now," he said.

Economists tend to view self-employment as being of less quality, though Mr. Zaman says he feels more fulfilled as an entrepreneur and expects steady pay will come within a year.

"I definitely see a lot of people start to consider entrepreneurship as a valid option, even compared with a couple of years ago," Mr. Zaman added.

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Over the past year, the private sector has led gains, growing 1 per cent, while public-sector employment is up 0.5 per cent and self-employment has risen 0.3 per cent.

More people are dropping out of the labour market altogether. The participation rate fell one notch to 66.3 per cent, its lowest level in nearly 12 years as 20,900 workers left.

"There are certainly signs that some workers are getting discouraged, but the drop is no doubt also being fostered by the increasing impact of population aging," noted Benoit Durocher, senior economist at Desjardins.

More men ages 25 and over landed jobs last month. The greying of the work force continues, with more than 70 per cent of the total employment increase in the past half-year among the 65-and-over crowd, noted HSBC's Mr. Watt.

Wages firmed. Average hourly wages accelerated to 2.6 per cent from a year ago, the fastest rate since last April and stronger than the pace of inflation.

Canada's labour market is tilting toward the services sector, which has grown at more than twice the pace of the goods-producing side in the past year.

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Most job gains in the past year have been in professional, scientific and technical services, finance, insurance and real estate along with health care and social assistance.

Professional services and health care continue to be an area of growth. Professional, scientific and technical services added another 16,600 positions, bringing the sector's one-year job gains to 80,100.

SAS Canada is among those planning to expand. The business analytics firm will add about 30 permanent, full-time positions this year, boosting its Canadian work force by 9 per cent. It's looking for account executives, software consultants and marketing executives.

The economy "has been steady and predictable" in the past few years, said president Carl Farrell in an interview, "and our market segment is growing much faster than the Canadian economy, which helps us then plan going forward."

Statscan's labour force survey is based on a sample size of about 56,000 households. The standard error is 28,900, meaning there is a two-thirds likelihood last month's employment gains ranged between 500 and 58,300.

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