Job seekers line up in front of a Dollar General booth at a job fair recently. Statistics Canada says the country's unemployment rate rose two-tenths of a point to 8.6 per cent last month as the struggling economy shed 43,200 jobs. (THE ASSOCIATED PRESS/Danny Johnston)

OTTAWA - Canada's economy shed more than 43,000 jobs last month in a clear indication that the struggling economy is still feeling the aftershock of the deep recession that erupted a year ago.

The unexpectedly large job loss - the consensus of economists was for a gain of 10,000 - pushed Canada's unemployment rate up two-tenths of a point to 8.6 per cent and reverses much of the previous two months' jobs rebound.

Rising unemployment in the early stages of a timid recovery from recession is not considered unusual, but the October data revealed unusual weakness given the hopeful signals of the previous two months.

Not only did 43,200 jobs vanish into thin air in October - the result would have been worse without the pick-up of 27,500 in self-employment during the month.

That meant there were 70,700 fewer actual employees in October - 45,200 fewer in the private sector, and 25,600 less in the public sector.

However, the result somewhat supports Statistics Canada's lesser-known industry tracking, which has recently reported mounting job losses even while the better-known labour market survey was detecting increases.

Bank of Montreal economist Michael Gregory said he was prepared for a weaker number than the consensus, but the extent of the job losses still came as a surprise.

And following a flat gross domestic product reading for July, followed by a slight contraction in August, he said there are real doubts about whether Canada has emerged from recession at all.

The Bank of Canada and private sector economists have predicted the economy would grow in the July-September quarter, after three negative quarters, but there has been widespread grassroots debate about whether the recession ended.

"Technically, we could still be in recession," Gregory said. "You are in recession until there is evidence you are not."

In a weak economy, economists discount self-employment gains as mostly involuntary, the result of enterprising Canadians who have tried but cannot find regular employment.

CIBC chief economist Avery Shenfeld noted that the October's job decline almost reverses the 58,000 job gains Statistics Canada found the previous two months.