UPDATE 4-Canada economy shrinks in August, clouds outlook

Wed Oct 31, 2012 1:24pm EDT
 
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* Growth unexpectedly contracts 0.1 percent from July

* Mining, oil and gas, manufacturing decline most

* Analysts see broad weakness, cutting forecasts

* Bank of Canada seen on hold for longer

By Louise Egan

OTTAWA, Oct 31 (Reuters) - The Canadian economy shrank in August for the first time in six months, an unexpected contraction that pointed to a sharp slowdown in third-quarter growth and reinforced the Bank of Canada's message that interest rate hikes are less imminent.

The 0.1 percent contraction from July reflected broad weakness across most industries as well as temporary shutdowns at some oil and mining sites, Statistics Canada said on Wednesday.

Analysts revised forecasts lower, noting economic pressures that went beyond oil and mining. The Canadian dollar fell.   Continued...