The Canadian economy unexpectedly shed jobs in April on the back of a drop in part-time positions, bolstering bets that the Bank of Canada will hold interest rates steady when its policymakers meet later this month.

The decline of 1.1k jobs was well short of market forecasts for an increase of 17.4k. The unemployment rate was unchanged at 5.8%, as expected.

Details of the report were encouraging, with full-time jobs rising and an acceleration in wage growth supporting expectations of another rate increase in July. The weakness in job growth last month was driven by a drop of 30k in part-time jobs, which offset a gain of 28.8k full-time positions.

Markets see a 68% probability the central bank will hike in July, which would make for its fourth rate increase over the course of a year.

Average hourly wages were up 3.3% in April from a year ago, the strongest annual rate since January. The Bank of Canada has been looking for a stronger pickup in wages to confirm the robust job gains Canada saw through 2017.

The bank acknowledged last month that wages have continued to pick up as expected and that it is watching the labor market for signs of remaining slack.

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