UPDATE 2-Canada's Ivey index rises more than expected

(Recasts with comments and details)

TORONTO, July 4 (Reuters) - Canadian business purchasing activity increased more than expected in June, according to the Ivey Purchasing Managers Index released on Friday, but the Ivey figures also signaled the Canadian jobs market may be weakening.

The purchasing index, the joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business, rose to 69.6 in June from 62.5 in May. That was better than market expectations for a reading of 62.0.

A reading of 50.0 indicates that activity remained flat from the preceding month, while a higher reading indicates an increase and a lower reading reflects a slowing or decrease.

"This index is not seasonally adjusted, but even when adjusting for seasonal factors, it is still a substantial rise," said Charmaine Buskas, senior economics strategist at TD Securities.

The report was a change of pace from recent domestic economic data that have shown the economy may be slowing more than the Bank of Canada had expected.

But The Ivey employment index dropped to 58.2 from 59.3 in the previous month, while the prices index climbed to 84.1 from 82.9.

According to Buskas, seasonal factors usually add 2 points to the employment index in June. With that adjustment the Ivey employment subcomponent looks weak, she said, and does not bode well for the June employment data due out next week.

In May, Canadian job growth was at its weakest level since December with the economy adding 8,400 jobs, which was below the median analyst forecast for 10,000 jobs.