As you tuck into the organic, range-fed turkey with all the trimmings this weekend, you can give a quiet, low-key, typically Canadian thanks for living in this quiet, low-key country. Sure, unemployment remains at high levels and the economic recovery is slowing. But Thanksgiving 2010 will be a good one, relatively speaking, for the great majority of Canadians.

Having spent last week in England — my second visit there in a month — I can offer up my own quiet thanks for being able to return to this country, which some English friends refer to as “the Great White Bore.” The dwindling number of British Christians who still attend church have recently been staging harvest festivals, their version of Thanksgiving in which rich tableaux of food are presented next to altars, a thanks to their God for nature’s bounty.

This year’s celebrations just happened to coincide with the new government unveiling plans for a festival of cuts that eventually might carve back government spending by a massive 40%, making for a bitter harvest of decades of excess.

Compared with Britain and any number of countries, including the United States, Canada is in not-so-bad shape. Of course, you can’t eat relative performance, as the Bay Street saying goes, only the absolute variety. Yet most of us will be able to sit down to a lunch or dinner this weekend that finds us in finer fettle than we might have hoped at Thanksgiving 2009, with the unemployment rate down in the past year, house prices staying firm against the odds, the stock market around a 52-week high and government budget deficits beginning to fall as tax revenues rise.

Just this week, the International Monetary Fund forecast Canada’s economy to grow 3.1% this year and 2.7% in 2011. Though those numbers are down from July projections of 3.6% and 2.8%, respectively, and are not typical of an economy in the early years of recovery, they are respectable given the even slower comeback for the United States, and remain “above potential,” according to the IMF, a circumstance that has us leading the G7 nations, however modestly.

Nevertheless, while most of us are giving thanks this weekend for our good fortune in finding ourselves in this particular corner of the world, some of us can’t help but wonder what we might be offering up thanks for a year from now.

One of the things missing from this recovery and something many of us savers of a certain age will be hoping for by next Thanksgiving is a rise in yields on fixed-income investments. Though the Bank of Canada has raised its overnight rate twice to 0.75% in recent months, GICs and the like are still paying the square root of squat.

Unfortunately, the decelerating recovery here and in the United States will likely put the BoC on hold in the months ahead. While it might seem selfish to wish for a more substantial interest rate increase, such a rise would signal an improvement in the economy and for economic prospects. The BoC and governor Mark Carney would like nothing more than to have to raise rates from their historic lows to guard against a rise in inflation, but will do so only in a substantial way if the U.S. economy shows stronger signs of recovering from its Great Recession.

Meantime, conservative investors – twice bitten by the stock market in the past decade and still shy of getting back in – will be monitoring the progress of equity prices, wondering whether it’s too late to begin buying or to buy more.

That question may be the centrepiece of some Thanksgiving table talk this weekend. Years ago, our Thanksgiving weekends were spent at the family cottage, where parlour games around the dining table were side orders to the lashings of food and drink. We played Scrabble, Monopoly and all manner of card games.

This year, your parlour game might consist of making forecasts for Thanksgiving 2011, writing them down and seeing where they stand a year from now.

I make the following predictions for a year from now: the S&P/TSX composite index will be around where it is now, or a little lower, as earnings advances become scarcer in still-struggling economies; interest rates will be a little higher, but not much; Canadian house prices will be 5% to 10% lower; gold and other commodities will hold their value as the U.S. dollar continues to weaken and emerging economies continue to grow; the loonie will be modestly over par against the greenback; and, finally, the Toronto Maple Leafs will once again have fans fantasizing about making the playoffs and winning the Stanley Cup.

The Bank of Canada raised its benchmark interest rate for a third consecutive time on Wednesday and sounded surprisingly hawkish despite predicting a more gradual than expected economic recovery.

The central bank nudged its overnight rate target up 25 basis points to 1 percent and, contrary to most economists’ expectations, did not signal a pause for its next decision in October. It said rates remained “exceptionally stimulative” but kept all options open due to doubts about the U.S. and global recoveries.

“Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook,” it said in a statement.

The Canadian dollar jumped to a session high against the U.S. currency, touching C$1.0369 to the U.S. dollar, or 96.44 U.S. cents from C$1.0486 to the U.S. dollar just before the announcement.

Short-term money market rates and bond yields also jumped. The yield on the rate sensitive two-year Canadian government bond rose to 1.377 percent from 1.266 percent just before the news.

“Generally it’s a very upbeat statement, it’s a little more hawkish than I anticipated,” said Derek Burleton, Deputy Chief Economist at TD Bank Financial Group. “This will cast some uncertainty about whether the bank will pause at the next fixed announcement date.”

The Bank of Canada has raced ahead of its Group of Seven peers in raising borrowing costs after the global financial crisis. It lifted its policy rate on June 1 from an all-time low of 0.25 percent and raised rates again on July 20.

The U.S. Federal Reserve, by contrast, has raised the prospect of further easing and counterparts in Europe and Japan are likewise far from ready to tighten monetary policy.

CLOSE CALL

 Markets had seen Wednesday’s rate hike as a close call because of rising fears of another U.S. economic downturn. Twenty-five out of 41 forecasters in a Reuters poll had predicted a hike. Most analysts also expected the bank to hold rates steady in October and December and possibly longer as it tracks developments elsewhere.

 After the rate announcement, markets were pricing in an about a 68 percent probability the bank would leaves rates unchanged in October based on yields on overnight index swaps, according to a Reuters calculation.

 “As it stands right now, our official call was for the Bank to remain on hold for the next few meetings, but that’s obviously something we have to review in light of the statement and as economic figures roll in the weeks ahead,” said Doug Porter, deputy chief economist at BMO Capital Markets.

 The Bank of Canada said the 1 percent rate is “consistent with achieving the 2 percent inflation target in an environment of significant excess supply in Canada.”

 The language was similar to that used in its last rate announcement on July 20. But the bank omitted any reference to weighing any further rate hikes “against domestic and global economic developments.”

 U.S. TO BLAME

 It acknowledged that the economic recovery was losing slightly more steam than it had anticipated just six weeks ago. Second quarter growth disappointed at a 2 percent annual rate versus the bank’s 3 percent projection. The bank will revise its official forecasts next month.

 It blamed the weaker economy in the United States, which buys three-quarters of Canadian exports, for the tepid rebound in Canada. High U.S. unemployment is holding back spending by individuals and businesses, it said.

 While exporters may take a beating, the bank sounded upbeat on domestic consumer spending and business investment.

“Going forward, consumption growth is expected to remain solid and business investment to rise strongly,” it said.

 Most recent U.S. data have dampened fears of a double-dip recession but the recovery there is still wobbly, making it uncertain whether the U.S. Federal Reserve will see fit to take further action to drive down already rock-bottom borrowing costs.

 The European Central Bank kept euro zone rates at a record low of 1 percent for the 16th month running last week and extended its program offering liquidity to banks.

The Bank of Japan stood pat on monetary policy on Tuesday but set the stage for possible easing next month.

The number of U.S. homes lost to foreclosure surged in July, as lenders take back more properties from homeowners who have been in default for months on end.

Lenders repossessed 92,858 properties last month, up 9 per cent from June and an increase of 6 per cent from July, 2009, foreclosure listing firm RealtyTrac Inc. said Thursday.

Banks have stepped up repossessions this year to clear out the backlog of bad loans. July makes the eighth month in a row that the pace of homes lost to foreclosure has increased on an annual basis.

Still, the number of homeowners who have fallen behind on their payments remains high, and these borrowers are being allowed to stay in their homes longer. That’s partly because lenders are reluctant to add to the glut of foreclosed homes on the market. They also are swamped with an unprecedented number of defaulting properties and have been overwhelmed by the volume.

The number of properties receiving an initial default notice – the first step in the foreclosure process – rose 1 per cent last month from June, but was down 28 per cent versus July last year, RealtyTrac said.

Initial defaults have fallen on an annual basis the past six months.

The latest data reflect a foreclosure crisis that continues to drag on as many homeowners struggle to make their monthly payments amid high unemployment, slow job growth and an uneven rebound in home prices.

Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can’t qualify or fall back into default.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 per cent, or about 530,000 homeowners, have fallen out of the administration’s main effort to assist those facing foreclosure.

That program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners, or 30 per cent of the 1.3 million who have enrolled since March 2009.

Still, RealtyTrac estimates more than one million American households are likely to lose their homes to foreclosure this year.

In all, 325,229 properties received a foreclosure-related warning in July, up 4 per cent from June, but down 10 per cent from the same month last year, RealtyTrac said. That translates to one in 397 U.S. homes.

The firm tracks notices for defaults, scheduled home auctions and home repossessions – warnings that can lead up to a home eventually being lost to foreclosure.

Among states, Nevada posted the highest foreclosure rate in July, with one in every 82 households receiving a foreclosure notice. The number of properties in Nevada receiving a foreclosure warning last month rose nearly 7 per cent from June, but fell nearly 30 per cent from the same month last year.

Rounding out the top 10 states with the highest foreclosure rate last month were: Arizona, Florida, California, Idaho, Michigan, Utah, Illinois, Georgia and Maryland.

Las Vegas continued to be the city with the highest foreclosure rate in the U.S., with one in every 71 homes receiving a foreclosure notice in July – more than five times the national average.

Canada avoided the brutal financial meltdown that plagued the U.S. economy, but there are some red flags that make recovery for this country “by no means a sure thing,” says a leading U.S. economist.

Paul Krugman, a Nobel Prize winner, New York Times columnist and renowned economic pundit, described Canada as “a very calm, very happy story” during the world economic crisis.

Canada escaped relatively unscathed, through a combination of good luck and sound, conservative regulation of banking and consumer debt in which “it is not so easy to use your house as an ATM,” Mr. Krugman told the Canadian Bar Association.

“Canada is an example of the virtues of a relatively traditional approach, a country that did not get caught up in the euphoria of banking innovation,” he said in a speech to hundreds of lawyers.

However, he warned that Canadians’ lavish spending habits, stubbornly high unemployment, and rising housing costs are potential trouble spots that could potentially turn a good news story into a bad one.

“There are a few aspects of Canada that are not scary but a little disturbing,” warned Mr. Krugman, a Princeton University professor.

“Canada is by no means insulated. It’s by no means a sure thing that everything is going to be OK.”

Despite better banking regulation, Canadians tend to “spend and borrow and awful lot like Americans,” Mr. Krugman said in his speech.

“Household debt relative to total income is very high here, not quite as high as the United States but getting close.”

On the plus side, however, Canadian confidence in the financial sector has not been shot, and it is helpful for Canada to have its own floating currency, Mr. Krugman said.

The Bank of Canada, in an economic forecast late last month, acknowledged that the global recovery would slow down as a result of an increased focus on budget-cutting at the household and government levels.

As a result, the central bank trimmed its growth outlook for the Canadian economy to 3.5% this year and 2.9 per cent in 2011, compared with earlier estimates of 3.7% and 3.1% expansion.

The Bank of Canada reported that economic growth petered out in the second quarter of this year, following softer household spending and declining real-estate activity.

In a separate speech on Sunday, Canada’s chief justice also weighed in on the foundation of a solid and sustainable economy, saying that it depends on a strong justice system and commitment to human rights.

“In the short term, a country that violates human rights can appear to be just and experience economic growth,” said Beverley McLachlin.

“But in the long term, instability and the waste of human potential, which are a direct result of a systematic suppression of individual rights and economic freedom, will invariably cause its downfall.”

Continuing weakness in the U.S. economy may force the Bank of Canada to put interest rate hikes on hold after September, notes a new report from CIBC World Markets Inc.

“North America’s story is again darkening,” says CIBC’s Chief economist in the latest Global Positioning Strategy report. “We were looking for a material second-half slowdown for the U.S. but as it turns out, it’s already happened.”

Economic growth stateside from April to June is being revised downward, Mr. Shenfeld notes, and key indicators are pointing to growth that will be slower than anticipated by U.S. monetary policy makers.

And still ahead is a “further fiscal belt tightening in 2011 that will have to be softened, and accompanied by quantitative easing, if the U.S. is to stay out of recession in early 2011 and get back to potential growth by the end of that year.

“Forget about any rates hikes from the U.S. Federal Reserve until sometime in 2012 at the earliest.”

While Canada is in much better economic shape – it leads the U.S., Eurozone, U.K. and Japan in first-half growth and has a record gap over the U.S. in the share of working age population holding a job – it “cannot move all the way to normalized interest rates while the U.S. Federal Reserve is still on hold,” Mr. Shenfeld contends.

For starters, an interest rate differential of 300-400 basis points would take the loonie “substantially stronger” creating additional headwinds for Canadian economic growth, says Mr. Shenfeld.

Furthermore, the “external environment will be one of less-than-normal growth as fiscal tightening bites in Europe and the U.S., and with our own upcoming fiscal tightening also hitting domestic demand, monetary policy might have to be set at stimulative levels to allow the economy to return to potential and remain there. To keep moving at all, you have to step on the gas if your car is trying to roll up a steep incline.”

Mr. Shenfeld doubts that the Bank of Canada “has been shocked enough to forestall a rate hike in September” but his forecast that Canadian growth in Q2 and Q3 will fall below the BoC’s outlook will likely warrant a rethinking in the October Monetary Policy Report and in the months to follow.

The report also notes that there are limits to how far the Bank of Canada can diverge from the U.S. Federal Reserve without later regretting it. Episodes in recent years in which rate overnight rates were 2 per cent or more above those stateside resulted in sagging or sacrificed growth. These are “lessons learned, we hope,” says Mr. Shenfeld.

“Since a hike at every rate setting date through 2011 would take rates substantially higher than 2%, a pause is coming on the road to tightening.”

As a result of the dampened external growth outlook, Mr. Shenfeld has trimmed his call for rate hikes. He sees Canadian overnight rates going no higher than 2% next year as the U.S. Federal Reserve stays on hold.

A less hawkish monetary policy combined with a mixed outlook for commodity prices affected by slow global growth will also likely see the Canadian dollar roughly two cents weaker than earlier forecast over the same horizon, adds Mr. Shenfeld.

The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent.

The global economic recovery is proceeding but is not yet self-sustaining. Greater emphasis on balance sheet repair by households, banks, and governments in a number of advanced economies is expected to temper the pace of global growth relative to the Bank’s outlook in its April Monetary Policy Report (MPR). While the policy response to the European sovereign debt crisis has reduced the risk of an adverse outcome and increased the prospect of sustainable long term growth, it is expected to slow the global recovery over the projection horizon. In the United States, private demand is picking up but remains uneven.

Economic activity in Canada is unfolding largely as expected, led by government and consumer spending. Housing activity is declining markedly from high levels, consistent with the Bank’s view that policy stimulus resulted in household expenditures being brought forward into late 2009 and early 2010. While employment growth has resumed, business investment appears to be held back by global uncertainties and has yet to recover from its sharp contraction during the recession.

The Bank expects the economic recovery in Canada to be more gradual than it had projected in its April MPR, with growth of 3.5 per cent in 2010, 2.9 per cent in 2011, and 2.2 per cent in 2012. This revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.

Inflation in Canada has been broadly in line with the Bank’s April projection. While the Bank now expects the economy to return to full capacity at the end of 2011, two quarters later than had been anticipated in April, the underlying dynamics for inflation are little changed. Both total CPI and core inflation are expected to remain near 2 per cent throughout the projection period. The Bank will look through the transitory effects on inflation of changes to provincial indirect taxes.

Reflecting all of these factors, the Bank has decided to raise the target for the overnight rate to 3/4 per cent. This decision leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending, and the uneven global recovery.

Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments.

There will be fewer homes sold this year, but for more money than initially thought, the Canadian Real Estate Association said Friday.

CREA downward revised its 2010 housing market forecast after a weak spring buying season in four of Canada’s most crucial markets.

National sales activity via the Multiple Listing Service is now expected to reach just 459,600 units this year, representing an annual decline of 1.2%.

That’s because the pent-up demand resulting from the recession is now running out and further interest rate hikes will keep homebuyers in a cautious mood, CREA said.

As new listings shrink to adjust to fewer buyers, home prices are now forecast to jump 3.5% in 2010 to reach a national average of $331,600.

“Slowing first-time home buying activity means lower- and mid-priced homes are making a smaller contribution to the average price calculation, causing the average price to be skewed upward as a result,” said Gregory Klump, CREA Chief Economist.

Prices are expected to ease off by 0.9% again in 2011, though some provinces could see modestly higher price tags.

“The hangover from accelerated home purchases earlier this year is expected to persist over the rest of the year, but positive economic and job market trends bode well for home price stability,” Klump said.

Big swings in the market could finally be behind us, he said.

“Homebuyers will no doubt welcome a more relaxed housing market in places where there was a shortage of supply earlier in the year.”

CREA expects that in 2011, slower economic growth and consumer spending will contribute to a 7.3% decline in home sale activity.

“While the jump in national sales activity earlier this year likely borrowed from the future, local markets trends are not necessarily in sync with national trends, so buyers and sellers would do well to consult with their local realtor to best understand the outlook in their market,” said CREA President Georges Pahud.

A chill swept Greater Victoria’s summer real estate market last month when both the volume of sales and average prices dropped significantly.

In July, 527 properties changed hands — down 43.5 per cent from the same month in 2009 during a red-hot market. The total value of July sales through the Victoria Real Estate Board came in at just over $257 million, a drop of 40 per cent compared to the same month last year.

Average prices for single family houses, condominiums and townhouses all slid month-over-month, the board said Tuesday.

The average price for a single-family house in Greater Victoria was $615,004 in July, down from $649,280 in June.

The region had 16 sales of more than $1 million, including one on the Gulf Islands.

Condominiums averaged $322,905 in July, down from $331,131 in June.

Inventory dropped to 4,477 in July from 4,730 in June, and the number of homes for sale was still 23 per cent more than the 3,632 of July 2009, the board said.

Real estate has been volatile in recent years as buyers rushed to purchase and joined bidding wars, followed by a cooling off when the recession arrived. Sales were slow at the start of last year, building up to strong numbers as buyers ventured back into the market.

But more recently, sales have been slowing and inventory rising.

Factors include mortgage interest rate affordability, tighter rules for low-equity buyers and more fragile consumer confidence, possibility influenced by the arrival of HST in July.

Randi Masters, president of the Victoria Real Estate Board, called the 2000s “rocket years” as sales numbers and priced climbed repeatedly.

The capital region’s market will become more balanced, similar to the late 1990s, she said. Sales will pick up but, “it is not going to be smoking hot like July of last year.”

Spring is typically Victoria’s strongest market when more homes are up for sale, gardens are blooming, and buyers start shopping, Masters said. The spring market starts solidly in February. July, August and into September normally sees some cooling off because people are on holidays.

Sales slumped for the area north of the Malahat as well. Single-family home sales decreased to 347 in July, down by 35 per cent from 536 sales in July of 2009, the Vancouver Island Real Estate Board said. June reported 415 sales.

Read more: http://www.vancouversun.com/business/Summer+sales+cool+Victoria/3357562/story.html#ixzz0vdraIx6N

Home buyers can expect more choice and lower prices in the second half of 2010, while sellers can expect fewer offers for their homes, says one of Canada’s leading real estate brokers.

“Accurate pricing is going to be really key,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services.

In its latest housing survey, Royal LePage said Wednesday the real estate market will start to slow in the second half of 2010 with the number of sales expected to fall compared with the hot activity earlier in the year.

“I would say if you’re a seller, the first thing you should expect is fewer multiple offers on your home,” Soper said.

Sellers who try to squeeze extra money out of their homes will likely have their homes “languish” on the market, unless they’re exceptional properties, he said.

“I believe we are through the highly volatile spiking of prices and activity levels, both up and down,” Soper said.

“We’ll see a much a more stable, but frankly less exciting in a good way, real estate market in the next 18 months,” he said.

The Canadian housing market has been a strong pillar under the economic recovery in Canada, mainly because of low mortgage rates and positive consumer confidence. However, interest rate increases and stiffer bank lending rules have taken some of the steam out of the sector since the early part of the year.

Soper said a lot of buyers were frustrated by a tight supply and “over-exuberant competition,” particularly in the 2010 first quarter, but that’s easing with increased listings.

In the first six months of 2010, about half of real estate transactions involved first-time buyers, he said.

“It took a while for sellers to get comfortable that the recovery from the recession was real. We had an all-time record number of new homes come on the market in the first quarter of 2010. It started to impact prices in the second half (of 2010).”

Derek Burleton, vice-president and deputy chief economist at TD Bank Financial Group, said the decline in homes sales is expected to accelerate and selling prices will also go down.

“The market is frothy and it’s going to come back down to earth for the usual reasons,” he said.

In the survey, Royal LePage said some markets will see a decline in home prices and sales volumes toward the end of 2010 but that should be seen more as a reaction to the highs reached late last year rather than a major slowdown.

Prices for detached bungalows and two-storey houses were up about nine per cent in the April-June quarter, compared with the same time last year. Condominiums were up 7.3 per cent.

Royal LePage is forecasting that by the end of 2010, home prices will rise an average 6.8 per cent over last year, while the number of home sales will increase by just over one per cent from 2009. http://news.therecord.com/Business/article/741919

By year end, the broker expects home price appreciation to average 6.8 percent year over year to C$342,000 ($325,714), while home sales will increase by about 1 percent to 470,000 units compared to 465,251 units in 2009, Royal LePage said.

That compares with double-digit price appreciation and sales growth during the peak of the Canadian housing boom.

“This should not be interpreted as a severe correction but rather a natural reaction to the market having peaked quite early this year.”

Overall, the broker expects the market to be supported by firm consumer confidence and a healthy job environment. Home prices in markets with strong local economies, such as Alberta, are expected to keep rising.

The average price of a detached bungalow in Canada climbed 9 percent to C$331,868 from a year earlier, while standard two-story homes rose 8.7 percent to C$367,835. Condominiums rose 7.3 percent to C$230,014.

In the second quarter, St. John’s, Newfoundland, reported the sharpest price increases, up an average 18.4 percent to 19.6 percent across three housing types, spurred by its robust oil sector.

Vancouver and Toronto, two of the country’s biggest markets, continued to show firm gains, though both are also expected to experience downward pressure in prices for the balance of the year.

Detached bungalows led the strong gains in Vancouver, up 19.1 percent in the quarter to C$905,000, while other housing types rose between 16.6 percent to 17.6 percent.

Greater Toronto home prices rose an average 7.7 to 11.4 percent year over year, with detached bungalows reaching an average price of C$481,933 in the second quarter. http://ca.news.finance.yahoo.com/s/07072010/6/finance-canada-home-prices-sales-stabilizing-2nd-half.html

Canada enjoyed another big month for employment in June, churning out a whopping 93,200 new jobs — almost all in Ontario and Quebec and all in the services sector.

The strong performance brings the jobless rate to 7.9 per cent, the first time it has been under eight per cent since the depths of the recession in January 2009.

The Canadian dollar rose sharply after the Statistics Canada report. A few minutes before the release, the loonie was trading overseas just below 96 cents US and jumped more than half a cent after the jobs report came out.

Canada’s dollar was at 96.71 cents US shortly before the official open of trading Friday, up about a cent from the previous close of 95.79 cents

With the employment gains in June, the Canadian economy has recouped almost all the jobs that were lost during the economic contraction that began in the fall of 2008.

But Statistics Canada noted that the unemployment rate remains well elevated above the 6.2 per cent that existed in October 2008 because many more Canadians have since joined the labour force.

Still, the quickly improving labour market likely gives the Bank of Canada all the evidence it needs to raise its key interest rates by another quarter-point to 0.75 per cent on July 20 in order to keep inflation in line.

There were a number of surprises in the Statistics Canada report.

Economists had expected a modest pick-up in the range of 15,000 new jobs because several economic indicators, including retail sales, exports and building permits, have been weak since March.

Also, the 109,000 additional jobs created in April suggested a pay-back was in order.

The other surprise was that the jobs were all concentrated in Ontario and Quebec, despite the fact that manufacturing actually shed workers during the month.

Ontario gained 60,300 workers, slicing the province’s unemployment rate 0.6 points to 8.3 per cent.

Meanwhile, Quebec gained 30,400 new jobs, bringing its unemployment rate to 7.8 per cent.

This was accomplished without any help from the manufacturing sector, a mainstay in both provinces, as factories actually shed 14,300 jobs overall in June.

All of the new jobs were in the services, including retail and wholesale trade, business building and other support services, health care, social assistance and other services, such as auto repair and personal care.

The agency said the new jobs were split between full-time and part-time, with more than half private sector.

There was also a big increase in student employment — 63,000 more last month than was the case in June last year.

However, there were setbacks. There were 10,200 fewer working in the goods producing industries last month, with losses in the factories sector leading the way.

Regionally, other provinces didn’t fare a well as Canada’s two most populous, with most recording slight gains and Newfoundland and New Brunswick outright job losses.