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When the history of Canada's latest recession is written, June, 2009, could prove to be the turning point.

Recent indicators - including a report Monday that showed retail sales increased five times faster in June than Bay Street economists had predicted - suggest governments' disparate efforts to flush cash into the global economy came together at the end of the first half to help increase Canada's gross domestic product for the first time in almost a year.

"We think the second quarter is the end of the Canadian recession," said Marco Lettieri, an economist at National Bank Financial in Montreal. "A general recovery is happening in Canada."

Retail sales - which grew 1 per cent from May - factory shipments and wholesale sales all rose in June, according to Statistics Canada data released this month.

The reports bolster the Bank of Canada's prediction in July that the economy would expand in the third quarter and begin a long, slow period of reconstruction from the first recession since 1992.

Combined, the retail, wholesale and manufacturing industries account for one-quarter of Canada's $1.2-trillion GDP. That's likely enough to tip the balance in favour of growth in June, a figure Statscan is scheduled to report next Monday. A big contributor to output as measured by Statscan - finance, insurance and real estate, which together account for about 21 per cent of GDP - almost certainly posted gains amid rising stock markets and a rebound in home buying.

"It appears the economy has bottomed," said Benjamin Reitzes, an economist at BMO Nesbitt Burns in Toronto, who predicted the latest retail figures likely mean GDP expanded in June, ending 10 consecutive monthly declines.

The rebound is fragile, given that much of the demand is the result of unprecedented intervention by governments and central banks.

Nouriel Roubini, the New York University economics professor who predicted the financial crisis, wrote Monday in the Financial Times that "there is a big risk of a double-dip recession" because timing the removal of government stimulus is so difficult. Finance ministers and central bankers could either act too soon, taking the global economy off life support before it's well enough to flourish on its own; or wait too long, running up deficits and risking inflation that would cause interest rates to rise, Mr. Roubini said.

Underlining the tentative nature of the recovery, Canada's main stock market, the Toronto-based S&P/TSX composite index, fell Monday despite the positive economic news after the head of a big U.S. bank predicted the financial industry faced further credit losses.

SunTrust Banks Inc. chairman and chief executive officer James Wells III, who leads Georgia's biggest lender, said in a speech in Atlanta that "the industry is a long way from declaring any sort of victory," according to an account by Bloomberg News.

The comments rattled markets in New York and Toronto, highlighting the shakiness of investor confidence and the biggest risk to the recovery. The S&P/TSX, which traded higher after the release of the retail sales data, ended the day 0.38 per cent lower at 10,789.97 because of a decline in North American bank shares.

"We need to not only transition from recession to recovery, but also from public demand to private demand," said Stewart Hall, an economist at HSBC Securities in Toronto.

The 1-per-cent rise in Canada's June retail sales, which compared with a median estimate for an increase of 0.2 per cent in a survey of 17 analysts by Bloomberg, was aided to great degree by government policy.

Sales of automobiles, automotive parts and gasoline led the increase.

The car industry is perhaps the biggest beneficiary of government stimulus through the bailouts of General Motors Corp. and Chrysler Group LLC and efforts by central bankers to reverse the credit crunch. Gas stations benefited from higher oil prices, which reflect stronger demand for commodities in countries such as China, which implemented the world's largest spending program.

Home Hardware Stores Ltd., Canada's largest independent seller of building materials, is getting a boost from the government's renovation tax credit, spokesman Rob Wallace said from St. Jacobs, Ont.

The company's eastern, central and western warehouses all are reporting higher shipments to more than 1,000 independently owned stores, and Home Hardware will open about 35 new outlets this year, almost as many as in 2008.

"We're ecstatic," said Mr. Wallace. "We're far ahead of where we expected to be."

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