OTTAWA - Don't call him Debbie Downer - economists say Finance Minister Jim Flaherty might be reticent to join the central bank in declaring the recession over because he knows Canada isn't out of the woods yet.

Although the economy is starting to pick up, experts say the indicator that impacts Canadians most directly - job growth - won't follow suit until much later when companies start hiring again.

That means the current jobless rate of 8.6 per cent could rise above nine per cent or even higher before the recovery fully kicks in, affecting everything from consumer and business confidence to spending intentions.

"Canadians in general won't feel it's the end of the recession until we start to get some better employment numbers," said TD economist Derek Burleton.

"I know the financial markets have improved, and that helps ... but not until those employment losses subside or the employment market begins to turn around that we'll get more official news of the end of the recession."

It could be awhile before that happens.

While many eyes are on gross domestic product - the broadest measure of how the economy is doing, combining goods production, services, jobs and consumer purchasing activity - job losses haven't yet abated.

Statistics Canada calculates 370,000 jobs have disappeared since October, and some economists believe more than 500,000 will be lost before labour markets begin to recover.

Yet hope of recovery glimmers.

Last week, Bank of Canada governor Mark Carney said Canada's economy will begin growing this summer after nine months of stagnation.

But Carney's rosy projections were fraught with cautions and caveats.

He warned economic recovery hinges on massive government stimulus and the central bank's vow to keep the policy interest rate at the historic low of 0.25 per cent until mid-2010.

Another roadblock to a solid bounceback in Canada is the state of the American economy, where a battered housing market, weak consumer spending and massive U.S. government deficits threaten to keep the world's biggest economy on the skids for a while longer. That will weaken growth prospects in all of America's trading partners, particularly Canada.

On Tuesday, Flaherty said there are signs a recovery is taking a foothold, but declaring the recession over might be premature.

"No, I think we will have to look back as we always do and look at this quarter," Flaherty said before a Tory caucus meeting where the economy was a key agenda item.

"There are good signs that the economy has stabilized," he said. "There are the beginnings of a recovery, and I wouldn't put it any stronger than that."

Why isn't Flaherty trumpeting the turnaround?

Burleton said the finance minister may still be smarting from the drubbing he took for his too rosy - and wildly inaccurate - projections in last November's economic update.

"The minister has obviously suffered some criticism earlier this year for being overly optimistic," Burleton said.

"That might be part of it, that he doesn't want to get ahead, expose himself to that risk that in fact it may not be the end of it."

Flaherty may also be mindful that signalling the end of the recession could lead to calls to plug the outpouring of government stimulus, said Royal Bank economist Paul Ferley.

Canada has pledged $46 billion over a two-year period to kick-start the sputtering economy.

"He's probably wanting to avoid pressure to start withdrawing the stimulus and make clear that we're not out of the woods yet," Ferley said.

"Certainly, when you look at an indicator like the unemployment rate, even if we see a return to positive growth, the gains are probably - at least initially - not going to be strong enough to prevent that unemployment rate from continuing to rise.

"So, certainly, there's going to be households out there that could still be negatively affected by the earlier downturn. And certainly it's not going to feel like recovery to them."

And potholes might dot the economy's road to recovery.

"Are we coming out of one of the worst recessions we've seen in a really long time? Yes. But do we see a straight-line, upward trend? No," said Sherry Cooper, chief economist at BMO Capital Markets.

"We could see a 'W' instead of a 'V,' we been saying."

At least one other Conservative cabinet colleague was as circumspect as Flaherty.

Transport Minister John Baird said it's too early to put the recession to bed.

"The governor's comments are obviously optimistic, which is a good thing," Baird said Wednesday.

"What we want to make sure of is that we don't pop out the champagne just yet. There's a lot of Canadian families that are still feeling the pain of the economic times that are going around the world."

Not all Tory MPs share their wariness. Trade Minister Stockwell Day supported the bank's analysis in a newspaper column published this week.

"I'm not kidding. The recession is over," Day wrote in the Penticton Western News on Monday.

"Last week, after poring over all the numbers (Carney) was able to declare, not on whim but based on economic fact that the nasty 'R' word no longer applied to Canada."

Day tempered those words as he emerged from a caucus meeting Wednesday.

"There are still challenges out there," he said. "We've got unemployed people and we've got to stay focused on keeping things on the right track."

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