UPDATE 2-Canada GDP rises for second straight month after five-month fall

(Adds market and analyst reaction, oil and gas extraction)
By Randall Palmer
OTTAWA, Sept 30 (Reuters) - The Canadian economy grew for
the second straight month in July after contracting for the
first five months of 2015, helping cement the idea that a
recession was short-lived and providing fodder to the ruling
Conservatives ahead of the Oct. 19 election.
Statistics Canada reported on Wednesday that real gross
domestic product (GDP) grew by 0.3 percent in July, exceeding
the 0.2 percent growth forecast in a Reuters survey of
economists.
The federal agency revised June's gain down to 0.4 percent
from 0.5 percent, mainly due to an upward revision in the dollar
level of May's GDP from the previous estimate.
"After a growth stumble in the first part of the year, the
Canadian economy appears to be picking itself back up," said
Nick Exarhos at Canadian Imperial Bank of Commerce (CIBC) World
Markets.
With a collapse in oil prices causing Canada's economy to
shrink in the first two quarters, the economy met the textbook
definition of recession and has figured prominently in the
federal election campaign. Opposition parties contend the
Conservatives have been bad economic managers.
Conservative Finance Minister Joe Oliver scheduled a news
conference for later on Wednesday morning, undoubtedly to
trumpet the renewed growth.
Economists said that with July's figures, third-quarter
growth would be on track to exceed the Bank of Canada's
forecast, increasing the likelihood the central bank would not
engage in a third rate cut this year.
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Graphic - Canada monthly GDP, exports to the U.S.:
http://link.reuters.com/jev87s
Graphic - Canada economic dashboard:
http://graphics.thomsonreuters.com/15/sc-canada/index.html
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CIBC, for example, pegs annualized growth for the quarter at
2.7 percent, above the Bank of Canada's 1.5 percent.
"It suggests that growth in the second quarter is going do
pretty well. We'd been looking at 2.5 to 3 percent growth and
this is pretty consistent with that for the quarter. It might
even suggest we might be on the higher side of that range," said
Benjamin Reitzes, senior economist and foreign exchange
strategist at BMO Capital Markets.
The Canadian dollar firmed to a session high on the GDP
data. CAD/
Figuring prominently in July's growth was a 4.4 percent rise
in oil and gas extraction after a 2.9 percent increase in June.