By Kim Mackrael 

OTTAWA -- Job creation soared above expectations in July as large gains in part-time, public sector positions helped nudge down the unemployment rate.

The Canadian economy added a net 54,100 jobs in July on a seasonally adjusted basis, Statistics Canada said Friday. Market expectations were for a gain of 17,000 jobs, according to economists at Royal Bank of Canada.

Canada's jobless rate, meanwhile, was 5.8% in July, down from 6% in the previous month. Market expectations were for an unemployment rate of 5.9%.

When using U.S. Labor Department methodology, Canada's jobless rate in July was 4.8%, compared with a 3.9% jobless rate in the U.S. In the 12 months to July 2018, the unemployment rate declined by 0.5 percentage points in Canada and 0.4 percentage points in the U.S., Statistics Canada said.

Friday's jobs report added to expectations that the Bank of Canada will raise its key interest rate again before the end of this year.

The Bank of Canada has raised its benchmark rate four times since mid-2017, most recently in July, bringing it to the current level of 1.50%.

Several economists said the surge in part-time positions undermined the strength of the overall gains.

While the jobs numbers "will keep markets guessing" between a September and October rate increase, CIBC World Markets economist Avery Shenfeld said, "there are lots of reasons to question just how good the data really are." Mr. Shenfeld said CIBC continues to anticipate a rate rise in October.

In July, average hourly wage growth advanced on a one-year basis by 3.2%, marking the seventh straight month the metric has moved up at a pace of 3% or higher.

The number of part-time jobs increased by 82,000 in July, while the number of full-time positions fell by 28,000. The public sector added 49,600 positions and the private sector gained 5,200 jobs. The number of workers who are self-employed -- usually independent contractors or freelancers -- contracted slightly in the month.

July's jobs gains were largely concentrated in services-producing industries, including education and health care and social assistance, Statistics Canada said. Employment in most goods-producing industries declined in July, with the biggest drops recorded in manufacturing, construction and natural resources.

Write to Kim Mackrael at kim.mackrael@wsj.com

(END) Dow Jones Newswires

August 10, 2018 10:18 ET (14:18 GMT)