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Jobless Rate May Climb

Posted On: 2009-07-27

By Jeff Nagel, BC Local News

A declaration by the Bank of Canada that the country's recession is coming to an end may not bring quick relief for many people in B.C.

Central One Credit Union economist Helmut Pastrick cautions that unemployment in this province – now at 8.1 per cent – will likely continue to rise, despite the beginnings of a recovery.

"I'm still predicting it will go above nine per cent," Pastrick said Friday, adding that level will likely be reached in mid-2010, after a temporary jobs boost from the Winter Olympics.

"Coming out of recession, the unemployment rate typically continues to rise, so for many it won't feel like the recovery is underway," he said.

"That's just a normal occurrence in the transition from recession to recovery."

He was responding to Bank of Canada Governor Mark Carney's forecast Thursday that Canada's economy will expand 1.3 per cent in the July to September period, turning the page on a nine-month economic contraction.

Pastrick expects business driven by low interest rates – home buying, spending on cars and discretionary consumer spending – will gather steam in B.C. and across the country.

Infrastructure stimulus spending will also help, he said, as the government puts money into hospital, road and bridge projects.

But there are still headwinds, notably big question marks about U.S. consumer debt levels.

"I think it's going to be a rather bumpy recovery, up and down," Pastrick said.

Home construction in B.C. is also likely to pick up in the months ahead.

"We've probably seen the low point in housing starts," he said. "They will be rising from here."

Originally published July 24, 2009, updated July 27, 2009

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