January 6, 2010 / 2:52 AM / in 8 years

Harper says economy on mend; jobs needed

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper said on Tuesday he was much more optimistic economically about 2010 but he would not be satisfied until the jobless rate starts to come down.

<p>Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, December 9, 2009. REUTERS/Chris Wattie</p>

Economic indicators were almost universally “moving a bit in the right direction” though the unemployment rate has barely budged, the Conservative leader said in a CBC television interview.

“When my fellow economists say, ‘Well the economy’s out of recession now,’ I tend to qualify that. We can argue that technically,” he said.

“But we all know that while the unemployment situation has stabilized, we haven’t yet recouped some of the job losses that we saw last year. Until we start to see that, I won’t be satisfied we’re on the road to recovery.”

He noted that Canada’s jobless rate had plateaued earlier and at a lower rate than in the United States but the current level around 8.5 percent was too high and needed to be closer the pre-recession range of 5.5 to 6.5 percent.

“The main thing is the direction. We’d like to see it start to fall,” he said.

Statistics Canada will release its December jobless report at 7 a.m. EST (1200 GMT) on Friday and analysts predict the unemployment rate will stay at 8.5 percent while 20,000 jobs will be added.

The problem will be just the opposite later, he predicted.

“I do think that it won’t be long after the recession is over that we’re going to start to see the longer-term problem, which is labor shortage in our economy,” he said, noting that this had hit some sectors and areas before the recession.

Harper was reelected in October 2008 to a second minority government, one in which he requires the support of at least one of the three opposition parties to stay in power.

There is little sign the opposition would team up to defeat him in the near future, given his substantial polling lead, and Harper said Canadians expected the economy rather than another election to be the focus.

“The consensus out there would be nobody wants an election. I don’t think anybody would see a reason for one. We continue to have economic challenges. As I say, we’re more optimistic (but) I don’t think the challenges have completely gone away and we’re still in a period of considerable uncertainty,” he said.

Editing by Jeffrey Hodgson

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