Unemployment will reach 7.5% by 2010: OECD

Canada will enter a recession in early 2009

Canada's unemployment rate will reach seven per cent by 2009 and 7.5 per cent by 2010, according to a report by the Organization for Economic Co-operation and Development (OECD).

Currently, the national unemployment rate is at 6.2 per cent.

The Paris-based organization also predicts Canada's economy will shrink in the current quarter and in the first and second quarters of 2009, which means Canada will be in a recession as defined as two consecutive quarters of GDP contraction.

The OECD outlook predicts real GDP growth will be down 0.49 per cent in 2009 but will climb in 2010 by 2.13 per cent.

Globally, the outlook predicts eight million people in the 20 OECD member countries will lose their jobs by 2010, raising the number of unemployed from 34 million to 42 million.

Economic activity among these countries is expected to fall by an average of 0.4 per cent in 2009 and then will rise slowly to 1.5 per cent in 2010.

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