OTTAWA - Canadians are in store for a harsh winter of economic news with substantial job losses mounting in the next few months as recessionary times take hold, the Global Insight forecasting firm says.

Managing director Dale Orr says the country will lose 100,000 jobs in the first three months of 2009 and believes Canada has already entered the first recession in 17 years.

While several of Canada's chartered banks have previously called for the economy to experience some shrinkage, it is the first time Global Insight - known for its detailed and cautious reports - has projected an outright recession.

A recession has been defined as two consecutive quarters of negative economic growth or shrinkage, usually measured by gross domestic product.

Canada's economy narrowly missed falling into recession by that measure in the first half of 2008, because the second quarter showed some growth.

Third-quarter GDP numbers for the full July-September period haven't been released yet..

Orr says the current October-December period will see the economy shrink 1.4 per cent on an annualized basis, with a further 1.2 per cent retreat occurring in the first quarter of 2009.

For the next year as whole, Orr says the economy will average zero growth.

"That's quite a stretch of miserable growth," he said.

Unlike the slowdown earlier this year, which was mainly been concentrated in the business community and the stock markets, this "will feel more like a recession" because of the significant job losses.

Orr said job losses will likely occur in the beleaguered auto sector and forestry - two hard-hit areas - but also in the construction trade as house starts fall, tourism and the financial services sector in response to the crisis in stock markets shock. "Main Street hasn't felt this (slowdown) yet because we've had pretty good labour markets but the next year going forward the labour markets are going to show it," Orr said.

The 100,000 reduction in employment forecast is in sharp contrast to the 104,000 jobs created in the first three months of 2008.

Orr said Canada's jobless rate will rise from the current 6.2 per cent to 7.2 per cent at the end of next year.

The revised Global Insight forecast comes amid two other reports that suggest Canada's economy is in for a rougher ride than most official sources, particularly political leaders, are currently willing to acknowledge.

The Deloitte consulting firm's annual survey on retail spending trends found that 40 per cent of respondents intend to curtail their purchases this holiday season, as opposed to 25 per cent who said so in last year's survey.