The latest jobs numbers were reported on both sides of the 49th parallel Friday, reflecting the continuing gap between the Canadian and American economies.

In Canada, employment resumed its upward trend with an increase of 55,000 in February. Since the start of 2002, when employment began to pick up steam, job gains total 613,000, an increase of 4.1%. Employment in finance, insurance, real estate and leasing continued to advance, with an increase of 20,000 bringing gains since the start of 2002 to 60,000.

Even with the increase in employment, the unemployment rate was unchanged at 7.4% in February, the result of more labour force participation.

South of the border the jobs picture is drastically different. The jobless rate rose to 5.8% last month as businesses eliminated 308,000 jobs, the steepest cuts since the 2001 recession. Analysts expected an increase of 10,000.

One third of the job losses can be attributed to reservists being called up for active duty. That still leaves a huge decrease.

The Canadian dollar is reacting positively to the news. It’s up to US68.25¢. Though the news may not be so good for the loonie if war breaks out in the Middle East. Investors are likely to run for cover to safer currencies, such as the euro, says Marc Levesque, senior economist at TD Bank.

Investors may get a better idea of the future after chief U.N. weapons inspector Hans Blix gives another update at the UN later this morning. Advance speculation has Blix saying that Iraq still has undestroyed supplies of anthrax and chemical weapons. But, he is also expected to say that the weapons inspectors are getting more cooperation from Iraq than they have ever gotten. Predictably, this kind of mixed message will prpetuate the split among security council members. Notably, Germany, France and Russia have now been joined by China.

European markets are not happy about this, in light continuing hard line comments from George Bush. The FTSE 100 is down 1.4% in early afternoon trading, losing 49.3 points to 3,506.1. The German DAX has fallen 0.7%, while the Paris CAC-40 has lost 1.5%.

Overnight in Asia, the Nikkei average hit a record low, closing down 225.03 points, or 2.7%, to 8,144.12, its lowest level since March 15, 1983. Hong Kong’s Hang Seng index fell 55.16 points to 907.10.