Statistics Canada said on Friday that 31.8k jobs had been created in June, most of them part-time, while the unemployment rate rose to 6.0% from 5.8% as more people sought work.

The market had predicted a gain of 24k positions 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 income growth. Average hourly wages in June rose by a healthy 3.5% from a year earlier.

The jobs gain was driven by an increase of 22.7k in part-time positions, while full-time work rose by 9.1k. Manufacturing employment grew by 10.9k jobs, the first advance this year.

Traders see an 85.6% chance of a hike next week, the overnight index swaps market indicated.

Separately, Statscan said Canada's trade deficit in May grew to CAD 2.77 billion  from CAD 1.86 billion in April on a sharp rise in imports of airliners and gasoline while exports edged down. The market had predicted a shortfall of CAD 2.05 billion.

The data underscored the continued importance of the U.S. market, which took 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.

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