WRAPUP 1-No light at end of tunnel in Canada jobs, trade data

* June net job losses smaller, gains in poor-quality jobs

* Q1 job losses much milder than in Q2

* Trade deficit in May is largest on record

* New housing prices slip in May

By Louise Egan

OTTAWA, July 10 (Reuters) - Trade and employment data showed Canada still mired in recession at the middle of this year, and virtually guaranteed that the Bank of Canada would keep interest rates at rock bottom until mid-2010.

Figures from Statistics Canada showed that fewer people lost their jobs in June than analysts had expected.

But that appeared to be due largely to what one analyst dubbed a "do-it-yourself recovery" -- people trickling back to work through self-employment or in part-time jobs while full-time job creation was scarce.

Net job losses in June totaled 7,400 and the unemployment rate rose to 8.6 percent from 8.4 percent in May, the highest since February 1998, Statscan said on Friday.

The data triggered a short-lived rise in the Canadian dollar, but the mood darkened on closer look at the report.

"The good news, such as it is, stops at the headline," said Doug Porter, deputy chief economist at BMO Capital Markets.

Eric Lascelles, chief economics and rates strategist at TD Securities, said the numbers were better than expected but not proof of a recovery in the labor market.

"We need to be somewhat cautious though because the quality of those jobs are not what one might desire," he said.

The Canadian dollar CAD=CAD=D3 rose as high as C$1.1615 to the U.S. dollar, or 86.09 U.S. cents, after the report.

But it soon erased those gains. By 10:45 a.m. (1445 GMT), the Canadian unit was at C$1.1649 to the U.S. dollar, or 85.84 U.S. cents, down from C$1.1623 to the U.S. dollar, or 86.04 U.S. cents, at Thursday's close.

The good news was that the pace of job losses slowed sharply in the second quarter at 13,000 compared with 273,000 in the first quarter, according to Statscan.