OTTAWA -- On Monday, we learn whether Canada did, in fact, emerge from the recession in the third quarter.
It's expected that Canada's economy did, indeed, go from shrinking to growing during the summer quarter.
A few days after that expected confirmation comes, we'll get a sense of how much real people have benefited from the recovery when November job numbers are released on Friday.
To kick the week off, Statistics Canada will provide third-quarter data on gross domestic product, and economists are forecasting, on average, annualized growth of 1% after a 3.4% contraction in the second quarter. The Canadian economy had been shrinking for three straight quarters up until that point, which is one more than needed to be considered a recession.
A country that has prided itself on being in better economic shape than the United States in recent times could suffer a blow to its national ego after these Canadian GDP numbers are released. After all, it seems likely the numbers will pale in comparison to the 2.8% growth seen during the same period in the U.S.
"While a 1% growth rate seems meagre for the Canadian economy, the details of the report are expected to be more pleasing than the headline number may suggest," Diana Petramala, an economist with TD Securities, wrote in a report. "In particular, the Canadian consumer has helped propel the economy into recovery, and retail sales data suggest that consumer spending grew over two per cent in the quarter.
"A red-hot real estate market has also helped support the economy by stimulating residential investment, related to a significant bounce-back in housing starts."
She even has good news for the struggling export sector. Ms. Petramala said third-quarter shipments should be up about 20%, making for the first increase in more than two years.
CIBC World Markets economist Krishen Rangasamy's expectations on third-quarter GDP are not as high as others. He is forecasting a 0.2% gain.
"The prospect of decent Q3 growth brought upon by a U.S. recovery, auto plant restarts and job creation in Canada did not unfold as promised, primarily because of an underperforming industrial sector," he said in a research note.
Mr. Rangasamy agreed that exports saw a resurgence in the last quarter, "but that did little to spur the manufacturing sector as factories opted to ship out of inventories rather than from the production line."
He's more optimistic about the current fourth quarter, for which he expects more than 4% GDP growth. His enthusiasm shows in his forecast for November job gains of 25,000 -- better than his peers' consensus of 15,000. That would follow a loss of 43,200 in October, which was the first negative month in three.
"Employment in November could feature gains in real estate services, construction and trade," said Mr. Rangasamy, who estimates the unemployment rate stayed at 8.6% last month.
The folks at TD Securities have a more reserved outlook on the employment front, forecasting a gain of 5,000 jobs as the jobless rate inched up to 8.7% with a greater number of people entered the job hunt.
"With the combination of the strong Canadian dollar and weak U.S. demand continuing to stifle the already beleaguered manufacturing sector, we expect the manufacturing sector to post further job losses in November, while employment in the construction industry should increase further on account of the strength in construction activity," said TD economics strategist Millan Mulraine.
U.S. employment numbers are also due Friday. Economists expect a loss of 120,000 jobs to be reported for last month, compared to the disappearance of 190,000 positions a month earlier. Expectations are that the unemployment rate stayed at 10.2%.SOURCE: CANWEST NEWS SERVICE