Canada's unemployment rate edged up 0.2 percentage points to 8.6 per cent in June but the economy only shed 7,400 jobs.
Economists had predicted that Canada would lose about 35,000 jobs in June.
"While employment remains well below its October 2008 peak, there was a notable shift in the pace of the downward trend in employment in the last three months," the Statistics Canada report said.
"Total net losses were 13,000 for the last three months, much less than the 273,000 decline in the first three months of this year."
Although the overall job losses were less than expected, economist Daniel Schwanen said it's still only a tentative sign that things are stabilizing in the Canadian labour market.
"It's not a great sign on the more traditional full-time job creation front," he told CTV's Canada AM on Friday.
According to the Statistics Canada report, full-time employment continued its downward trend in June, offsetting gains in part-time work.
In total, 47,500 full-time jobs disappeared in June, raising the total losses in the category to 454,000.
The full-time job category is seen as the most reliable indicator of labour market strength.
Meanwhile, self-employment rose in June by 1.5 per cent. Comparatively, the number of employees has declined by 3.3 per cent in the private sector and 1.4 per cent in the public sector.
Schwanen said the spending stimulus hasn't had much of an impact yet because the projects are still rolling out.
"The real impact is going to be in the months ahead simply because of the time lag necessary to put the projects in place," he said.
The report said the summer job market was also in a slump as there were 43,000 fewer students aged 20 to 24 working in June than during the same month last year.
"This pushed their unemployment rate up 4.8 percentage points to 14.0 per cent, the highest June unemployment rate for these students since 1997," the report said.
Provincially, Newfoundland and Labrador was the only province with employment gains, up 2,500, in June. Still, the province's unemployment rate edged up to 15.6 per cent since more people were looking for work.
In Ontario, full-time losses (-56,000) were offset by part-time gains (+57,000), leaving total employment unchanged. The unemployment rate edged up to 9.6 per cent in the province last month.
Saskatchewan was the only province with an upward trend in employment since October (+1.0 per cent). At 4.6 per cent in June, the unemployment rate in Saskatchewan was the lowest of all provinces.
Earlier this month, the U.S. reported its jobless rate hit a 26-year high after the economy shed 467,000 jobs in June. And despite Washington's billions in stimulus spending, unemployment now sits at a dismal 9.5 per cent.
In a research note Friday, BMO Nesbitt Burns said Canada's job report compares favourably to the situation south of the border.
"Still, even if the job losses are gradually easing, it's obvious that recession has yet to let go its steely grip on the Canadian economy, with the squeeze remaining particularly intense in manufacturing."
