OTTAWA - Canada's previously unstoppable job-creating machine shifted into reverse in June - particularly in Ontario - throwing tens of thousands of Canadians out of full-time work, although an almost equal number found part-time positions.

In all, there were 5,000 fewer jobs in June and the country's unemployment rate edged up one-tenth of a point to 6.2 per cent, the highest since January 2007.

The national numbers masked a starker reality in some regions. In Ontario, 45,500 full-time workers lost their jobs or were put on part-time work in June.

Nationally, there were 39,200 fewer full-time workers.

Four provinces had small increases in full-time work - B.C. and the three Maritime provinces - while the other six, including Alberta, had declines.

Only an increase of 34,200 part-time jobs in June, including 10,000 in Alberta, kept the national report from showing a more pronounced employment pullback.

"Reality may finally be catching up with the Canadian job market," said Douglas Porter, deputy chief economist with BMO Capital Markets.

"We wouldn't make too much of a one-month dip in employment. However, the jobless rate continues to gradually grind higher ... while full-time employment growth is clearly fading."

Statistics Canada noted that Canada has still produced 290,000 new jobs in the past 12 months, a 1.7 per cent increase.

But the economy is clearly showing signs of running out of gas.

After starting 2008 on a tear by pumping out 46,000 new jobs, employment growth has been on a downward track ever since.

And the 5,000-job retreat in June tells only part of the story. It was the second month in a row that full-time employment fell sharply, after a loss of 32,000 in May.

Full-time employment has now fallen by 70,000 in the past four months - a key indicator that the economy may be losing one of its key mainstays in averting a recession.

Bank of Nova Scotia economist Adrienne Warren said she believes it won't get much better for the rest of the year.

Two particular signs of weakness, she said, were the relatively large number of lost full-time jobs and the fact the losses were widespread - not concentrated in manufacturing, as in previous months.

"It's obviously not good news," she said. But Canadians should not be concerned they will be facing a U.S.-style retrenchment, which has cut employment in six consecutive months for a total of 438,000 jobs, she added.

"I think there are still a lot of areas of the economy doing quite well," Warren said.

"That suggests we're not going to see big job losses, mainly due to the strength of the resource-based industries across the country that will still provide support to other industries."

The Canadian dollar fell by about nine-tenths of a cent after the job data - seen as reducing the likelihood the Bank of Canada will raise interest rates. By early afternoon the currency was at 99.05 cents, off 0.05 cent from Thursday, reviving on record oil prices.

The Canadian Labour Congress called on the central bank to cut rates to stimulate business and consumer borrowing and inject life into the economy.

"We need decisive intervention," said CLC president Ken Georgetti. "The Bank of Canada must focus on jobs and families before apparent signs of future inflation."

With the job market weakening, BMO's Porter said it is likely that wage increases will moderate, further cooling inflationary pressures.

The June jobs retreat was widespread among sectors, said Statistics Canada.

"The only industry with a notable employment increase in June was professional, scientific and technical services, where monthly gains totalled 37,000," the agency said.

But most industries lost jobs - everything from health care to construction.

While the troubled manufacturing sector was largely unaffected by further job losses in June, factory jobs were down 33,000 from a year ago, the agency said.

The oil-based Alberta economy created a record 10,000 jobs in June, heavily part-time but pushing the province's employment rate to 72.2 per cent, an all-time high.

Nova Scotia had its best-ever employment rate, at 59.3 per cent after picking up 6,200 new jobs in June. Prince Edward Island, New Brunswick and British Columbia also added full-time jobs.

Story Source: Canadian Press