Canada recovery speed in doubt after jobs data

Fri Aug 7, 2009 2:12pm EDT
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By Louise Egan

OTTAWA (Reuters) - Canadian job losses in July were more than double what had been expected, prompting the finance minister to speak out to try to calm any "euphoria" over an imminent economic recovery.

Statistics Canada said on Friday the economy suffered net job losses of 44,500 in the month, more than double the number expected as employers cut workers even though the economy is commonly thought to be on the mend after its worst recession since the early 1990s.

The construction industry bled the most workers, followed by food and accommodation services, while factory workers were largely spared.

The unemployment rate remained unchanged from June at an 11-year high of 8.6 percent as fewer people stayed in the labor market looking for work.

The dismal numbers may push some economists to push back their forecasts of an economic turnaround this quarter.

"This indicator suggests that economic recovery needs to be pushed off perhaps a little further," said Eric Lascelles, chief economist at TD Securities.

A separate release showed purchasing activity in the Canadian economy expanded in July for a second straight month but at a slower pace than expected.

Finance Minister Jim Flaherty, in an interview with CTV television, warned Canadians to expect more job losses for months to come and said the recession is not over yet.   Continued...