October 8, 2010 / 5:28 PM / in 7 years

Harper says economy headed in right direction

OTTAWA (Reuters) - Prime Minister Stephen Harper on Friday said he is confident the global economy, while fragile, is headed in the right direction and he sees no need for further fiscal stimulus to bolster domestic growth.

<p>Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa October 5, 2010. REUTERS/Chris Wattie</p>

Harper’s comments followed data showing Canada shed 6,600 jobs in September. Economists had expected a gain of 10,000. The unemployment rate dipped to 8.0 percent from 8.1 percent as less people were looking for work.

South of the border, U.S. non-farm payrolls fell in September by 95,000, missing expectations and coming in below levels that would suggest a self-sustaining recovery from the recession.

“Obviously, the results are not as good as we had hoped,” Harper told reporters in Edmonton. “It’s a mixed bag. There’s some job loss which we never like to see. On the other hand, the unemployment rate did go down, we see some increase in full-time positions, also in paid positions. It’s not yet where we want to be.”

Harper said that the Canadian labor market had stabilized, and earlier, he told a Calgary-based talk radio program that there were signs that the U.S. job market was beginning to stabilize.

He said both promising and worrisome signals about the global recovery have emerged recently, but he was optimistic about the overall trend.

“My own take on this tends to be a little more on the optimistic side. I think things are much better now than we would have thought they would be if we looked back some 18 months ago,” he said, adding “we can not take our eye off the ball.”

After the release of the U.S. employment report, analysts said it was almost certain that the U.S. Federal Reserve would announce a second round of asset purchases next month to aid the flagging economy, though there seemed to be no consensus among policymakers.

Harper said his government had no plan to extend Canada’s stimulus program, which wraps up in March of next year.

“There’s nothing today that would indicate to me that we should look at another quote ‘stimulus package,'” he said.

“I just don’t think the circumstances now, or the circumstances in the year to come, are likely to be anything like what we had in late ‘08 and early ‘09,” he said, referring to the global financial crisis that led to massive government spending to pull the economy out of recession.

“But like I say, we will always make sure we are watching this carefully and we’re flexible if situations change.”

Harper said that after March, the government would move to “a much greater emphasis” on deficit reduction.

Editing by Jeffrey Hodgson

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