OTTAWA: Canadian unemployment rose two-tenths of a point to 8.6 percent in June as 7,400 jobs were lost, official data showed Friday.

Statistics Canada said the higher jobless rate resulted from more people joining the labor force looking for work.

The report was better than the consensus forecast of economists, who had expected a loss of 35,000 jobs and an unemployment rate of 8.7 percent.

Although the overall employment picture worsened, the pace of decline appeared to ease. Total net losses were 13,000 for the past three months, much less than the 273,000 decline in the first three months of this year, the agency said.

In June, the manufacturing sector was especially hard hit with 25,700 jobs shed, while construction employment rose by 7,800.

Employment gains of 26,000 were seen in information, culture and recreation, and 21,000 were added in the sectors of finance, insurance, real estate and leasing.

But analysts said the details of the report were weak.

"Today's job report is not as friendly as the headline would suggest," said Sherry Cooper, chief economist at BMO Capital Markets, who noted that full-time employment fell by 47,500, and private sector employment was down 39,300, offset by a rise in self-employment by 37,000.

"But even if the Canadian job losses are gradually easing, it's obvious that recession has yet to let go its steely grip on the economy, with the squeeze remaining particularly intense in manufacturing."

Avery Shenfeld at CIBC World Markets said the gains in self-employment were "not encouraging for output, as such jobs tend to entail fewer hours."

"Read this as a roughly as-expected soft reading on the Canadian economy," Shenfeld said.