UPDATE 1-Canada economy growth pauses in Oct., weaker oil and gas offsets retail gains

retail gains@ (Adds details from report)

OTTAWA, Dec 22 (Reuters) - Canadian economic growth unexpectedly paused in October as a decline in oil and gas extraction offset gains in the wholesale trade and retail sectors, data from Statistics Canada showed on Friday.

The unchanged reading for gross domestic product was short of economists' forecasts for a gain of 0.2 percent following September's unrevised 0.2 percent increase.

Growth in the second half of 2017 is expected to have cooled from the blistering pace set in the first half of the year, though analysts expect improvement in the labor market and inflation will see the Bank of Canada continue to tighten interest rates next year.

Activity in goods-producing sectors of the economy declined by 0.4 percent in October, led by a 1.1 percent pullback in the mining and oil and gas extraction industry.

It was the fourth decline in the sector in five months as non-conventional oil extraction fell, partly due to a loss of capacity during maintenance. Mining also declined by 0.8 percent.

But the weakness was tempered by a 1.4 percent increase in wholesale trade, which was helped by sales of machinery and equipment.

The retail sector grew by 1.1 percent after three consecutive months of declines as consumers bought more new and used cars. Overall, the service sector grew by 0.2 percent.

(Reporting by Leah Schnurr; Editing by Phil Berlowitz)