Interest rate hike looms following strong June unemployment report

* source: CBC News, Friday, July 6, 2007 4:27 PM ET

Canada's economy grew by 35,000 jobs in June, nearly double expectations, fuelling speculation (the) Bank of Canada will raise interest rates next week.
For (the) fifth straight month, Canada's unemployment rate remained at ( a ) 33-year low of 6.1 per cent, Statistics Canada said Friday.
"Against this backdrop, (the) Bank of Canada appears fully primed to hike rates next week," Douglas Porter, deputy chief economist, BMO Capital Markets, said in ( a ) report.
"We expect (the) bank to raise (the) policy rate by 25 basis points next week and by ( a ) further 50 basis points in two 25 basis-point moves by (the) end of 2007," said RBC Economics.
(The) strong jobs report pushed (the) Canadian dollar higher Friday. (The) loonie rose to 95.33 cents U.S. — its highest level since May 26, 1977 — up seven-tenths of ( a ) cent over Thursday's close.
In June, manufacturing jobs continued to decline, while (the) biggest employment increases were in retail and wholesale trade, business, building and other support services.
For (the) second month in ( a ) row, full-time work rose in June, while part-time employment fell, Statistics Canada said.
Adult women accounted for most of June's increase in full-time and all of (the) decline in part-time employment, added (the) agency.
The biggest job gains came in Quebec, Alberta and New Brunswick. Job growth in Saskatchewan and Newfoundland and Labrador dropped while Ontario remained mostly unchanged.
Two-thirds of (the) job growth came from self-employed workers, while (the) rest were from company employees.
"The labour market remains drum-tight, as clearly displayed by (the) continued low jobless rate and now some bubbling upward pressure on wages," Porter added.
Looking at (the) first half of 2007, (the) Canadian economy added ( a ) total of 197,000 jobs, ( a ) 1.2 per cent increase — similar to growth seen over (the) first half of 2006.
The provinces with (the) biggest employment gains for (the) six-month period were New Brunswick at 3.1 per cent, Alberta at 2.5 per cent, and British Columbia with ( a ) 1.9 per cent rise.
Ontario, which makes up nearly 40 per cent of total employment in Canada, grew only 0.4 per cent over (the) first half of 2007.