The US unemployment rate edged higher last month amid weaker than expected jobs growth, underscoring fears of a sluggish economic recovery.

[The figures are] not strong enough to say that the Fed has to move more quickly than the markets have anticipated

Steve Ricchiuto, ABN Amro

The jobless rate rose to 5.9% in June from 5.8% the previous month, the US Labor Department said.

While the increase in unemployment was below most analysts' forecasts, separate figures showed that the US economy generated far fewer new jobs than expected.

Non-farm businesses hired an extra 36,000 workers in June, falling far short of the predicted 86,000 increase.

Rate rise delay

The slower pace of job creation suggests that employers were reluctant to take on staff, in a sign that business confidence remained subdued.

It also points towards further increases in the headline unemployment rate in the months ahead.

Analysts estimate that about 100,000 new jobs need to be created every month in order to forestall further increases in the jobless rate.

The latest figures support the widely held view that the US Federal Reserve will delay raising interest rates for some months to come.

"[The figures are] not strong enough to say that the Fed has to move more quickly than the markets have anticipated," said Steve Ricchiuto, economist at ABN Amro.

Labor Department statisticians said the jobs market is in a lull.

"The labour market has been in a holding pattern in recent months, with non-farm payroll essentially flat since February and no significant change in the unemployment rate since April," the department said.

No respite for manufacturers

The beleaguered US manufacturing sector remained under pressure in June, with employers there shedding jobs for the 23rd month in a row.

Retailers also retrenched, axeing 18,000 workers.

But employment in the construction, services and government sectors rose.

Elsewhere, Canada's official statistics agency on Friday said the unemployment rate there fell to 7.5% in June from 7.7% the previous month.