PREVIEW-Canada 3rd quarter to herald return to slim growth

* What: Statscan releases Q3 and Sept GDP

* When: Monday Nov. 30 at 8:30 a.m. (1330 GMT)

* Expected: Q3 +0.6 pct annualized

By Ka Yan Ng

TORONTO, Nov 26 (Reuters) - The Canadian economy may have wriggled out of recession in the third quarter despite false starts in July and August, and momentum from September puts the economy on track to recover.

The median forecast of analysts surveyed by Reuters as of Thursday is for gross domestic product to rise an annualized 0.6 percent in the third quarter, helped by a robust housing sector, increased consumer confidence and stronger manufacturing and retail sales.

That follows annualized output declines of 3.4 percent in the second quarter, 5.4 percent in the first quarter and 3.7 percent in the fourth quarter of 2008.

Third-quarter growth would also spring Canada into the company of other Group of Seven industrialized nations who have already pulled out of recession.

"When we see the rebound in spending and we see the activity in housing, I think those are pretty solid indicators that things are starting to move forward," said John Clinkard, chief economist at Deutsche Bank of Canada.

Exports had weak moments in the quarter, particularly with the strong Canadian dollar. But they surged in September, which should help the overall picture.

The GDP data is expected to maintain market expectations that the Bank of Canada will keep its promise of record low rates until mid-2010, assuming inflation doesn't rise.

Inflation returned to Canada in October after a short bout of falling prices. But price pressures were tame, with the consumer price index up just 0.1 percent on the year. [ID:nN1892543]

And while news of job cuts such as those made by Bombardier and Rogers Communications on Thursday may dampen consumer spending, Clinkard pointed to sectors like financial services and construction, that have bright prospects and will contribute to the recovery. [ID:nN26294891] [ID:nN26396679]

Doubts about Canada's recovery arose when the economy shrank unexpectedly in August after a flat July reading.

The doubts were reinforced last week when Finance Minister Jim Flaherty said Canada's economic turnaround will likely materialize in the fourth quarter, one quarter later than the Bank of Canada projected last month. [ID:nN1918012]

Bank of Canada Governor Mark Carney said on Nov. 19 that the bank's projection last month of 2 percent annualized growth in the third quarter did not likely materialize but that the economy is recovering. [ID:nN19514256]

The Organisation for Economic Co-operation and Development said Canada's third-quarter gross domestic product would have a "flattish profile, with recovery coming thereafter."

"One thing we do know, whatever happens in Q3, is that Q4 is going to be much better because there's a lot of momentum in September. And even if officially we're not out of recession in Q3, you can say we are out of recession now," said Michael Gregory, senior economist at BMO Capital Markets. ($1=$1.06 Canadian) (Reporting by Ka Yan Ng; editing by Janet Guttsman and Jeffrey Hodgson) ((kayan.ng@thomsonreuters.com; Reuters Messaging: kayan.ng.reuters.com@reuters.net; 416-941-8109))