The Canadian economy added more jobs than expected in June, adding fodder to market expectations that the Bank of Canada will raise interest rates for the fourth time in a year next week.
Statistics Canada said on Friday that 31,800 positions were created in June, most of them part-time, while the unemployment rate rose to 6% from 5.8% as more Canadians were out looking for work.
Analysts predicted a gain of 24,000 jobs and said the jobless rate would remain unchanged.
The Bank of Canada has raised rates three times since July 2017 and Governor Stephen Poloz said last week economic data would decide the next move on July 11.
The central bank also pays close attention to average hourly wages, which hiked in June by 3.5% from a year earlier.
The jobs gain was driven by an increase of 22,700 in part-time positions, while full-time work rose by 9,100. Manufacturing employment grew by 10,900 jobs, the first advance this year.
Traders see an 85.6% chance of a hike next week, activity on international markets overnight indicated.
Separately, StatsCan said Canada's trade deficit in May grew to $2.77 billion from $1.86 billion in April on a sharp rise in imports of airliners and gasoline while exports edged down. Analysts had predicted a shortfall of $2.05 billion.
The data underscored the continued importance of the U.S. market, which took in 74.2% of all Canadian goods exports in May. The Bank of Canada says uncertainty over trade tensions between Canada and the United States is one of the biggest potential threats to the economy.
