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26.5 million Americans join unemployed ranks as coronavirus ravages economy – The Globe and Mail

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A woman looks for information on the application for unemployment support at the New Orleans Office of Workforce Development, as the spread of coronavirus disease continues, in New Orleans, Louisiana U.S., April 13, 2020.

Carlos Barria/Reuters

A stunning 26.5 million Americans have sought unemployment benefits since mid-March, confirming that all the jobs gained during the longest employment boom in U.S. history have been wiped out as the novel coronavirus ravages the economy.

The deepening economic slump amid countrywide lockdowns to control the spread of COVID-19, the potentially lethal respiratory illness caused by the virus, was underscored by other data on Thursday showing business activity sinking to an all-time low in April. In addition, new home sales decreased by the most in more than 6 1/2 years in March. “At this point it would take a miracle to keep this recession from turning into the Great Depression II,” said Chris Rupkey, chief economist at MUFG in New York. “The risks to the outlook are that the economy is digging itself such a big deep hole that it will become harder and harder to climb back out of it.”

Initial claims for state unemployment benefits totalled a seasonally adjusted 4.427 million for the week ended April 18, the Labor Department said. That compared with 5.237 million in the prior week. Economists polled by Reuters had forecast 4.2 million claims in the latest week.

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Since March 21, 26.453 million people have filed claims for unemployment benefits, representing 16.2 per cent of the labour force. That has led to dire predictions of 30 million job losses during the COVID-19 pandemic and an unemployment rate at levels not seen since the Great Depression. The economy created 22 million jobs during the employment boom which started in September, 2010, and abruptly ended in February this year.

The rising tide of grim economic numbers has been met with protests, which have largely been viewed as political, for states and local governments to reopen non-essential businesses. President Donald Trump, who is seeking a second term in the White House in November’s general election, has also been growing anxious to restart the paralyzed economy.

A handful of Republican-led states are reopening their economies, despite warnings from health experts of a potential new surge in infections. Economists also warn that there is no guarantee that Americans will feel safe to visit shopping malls.

“Today’s report shows the labour market is almost certainly pushing into new territory, jolting the unemployment rate up above the Great Recession’s 10-per-cent peak and wiping out more jobs than we’ve gained in the recovery,” said Daniel Zhao, senior economist at Glassdoor, a website recruitment firm.

In a separate report on Thursday, data firm IHS Markit said its flash U.S. Composite Output Index, which tracks the manufacturing and services sectors, plunged to a reading of 27.4 this month, the lowest since the series began in late-2009, from 40.9 in March.

New home sales fell 15.4 per cent to a seasonally adjusted annual rate of 627,000 units in March, the Commerce Department said in another report. The percentage decline was the largest since July, 2013.

RAPID DETERIORATION

The deteriorating economic data reinforces economists’ contention that the economy entered recession in March.

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The National Bureau of Economic Research, the private research institute regarded as the arbiter of U.S. recessions, does not define a recession as two consecutive quarters of decline in real GDP, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.

Last week’s claims report covered the period during which the government surveyed business establishments for the non-farm payrolls component of April’s employment report. Economists are forecasting as many as 25 million jobs were lost in April after the economy purged 701,000 positions in March, which was the largest decline in 11 years.

Although weekly jobless filings remain very high, last week’s 810,000 decrease in claims marked the third straight weekly decline in applications, raising hopes that the worst may be over. Weekly claims appeared to have peaked at a record 6.867 million in the week ended March 28.

Stocks on Wall Street were trading higher as investors focused on the weekly decline in claims. The dollar slipped against a basket of currencies. U.S. Treasury prices were trading mostly lower.

Florida, which together with Tennessee, South Carolina and Georgia is reopening businesses this weekend, continued to see a surge in claims last week. But New York and Michigan reported fewer applications. Georgia reported a drop in claims.

The overall decrease in claims has been attributed to difficulties by states in processing large volumes of applications and a historic US$2.3-trillion fiscal package, which made provisions for small businesses to access loans that could be partially forgiven if they were used for employee salaries.

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An additional US$484-billion in a fresh relief package for small business loans is expected soon. The handful of states easing restrictions could serve as a barometer for the overall economy when it reopens.

“We would assume jobless claims will fall back sharply here, but if consumers remain reluctant to go shopping or visit a restaurant due to lingering COVID-19 fears, then employment is not going to rebound quickly,” said James Knightley, chief international economist at ING in New York.

“As such it would be another signal that a V-shaped recovery for the U.S. economy is highly unlikely.”

With weekly claims stabilizing, the focus is shifting to the number of people on unemployment benefits rolls. The continuing claims data is reported with a one-week lag.

Continuing claims jumped 4.064 million to a record 15.976 million in the week ending April 11. Continuing claims have not increased at the same pace as initial jobless applications.

Economists believe some people thrown out of work because of state-mandated “stay-at-home” orders found employment at supermarkets, warehouses and delivery services companies. They expect the unemployment rate will shatter the post-Second World War record of 10.8 per cent touched in November, 1982.

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The jobless rate shot up 0.9 percentage point, the largest single-month change since January, 1975, to 4.4 per cent in March.

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People more important than the economy, pope says about Covid crisis – The Journal Pioneer

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By Philip Pullella

VATICAN CITY (Reuters) – Pope Francis said on Sunday that people are more important than the economy, as countries decide how quickly to reopen their countries from coronavirus lockdowns.

Francis made his comments, departing from a prepared script, at the first noon address from his window overlooking St. Peter’s Square in three months as Italy’s lockdown drew to an end.

“Healing people, not saving (money) to help the economy (is important), healing people, who are more important than the economy,” Francis said.

“We people are temples of the Holy Spirit, the economy is not,” he said.

Francis did not mention any countries. Many governments are deciding whether to reopen their economies to save jobs and living standards, or whether to maintain lockdowns until they are sure the virus is fully under control.

The pope’s words were met with applause by hundreds of people in the square, many of whom wore masks and kept several meters from each other. The square was reopened to the public last Monday. Normally tens of thousands attend on a Sunday.

The last time the pope delivered his message and blessing from the window was March 1, before Italy, where more than 33,000 people have died from the virus, imposed a lockdown. The last restrictions will be lifted on Wednesday.

Francis led the crowd in silent prayer for medical workers who lost their lives by helping others.

He said he hoped the world would come out of the crisis more united, rather than divided.

“People do not come out of a crisis like this the same as before. We will come out either better or worse than before. Let’s have the courage to emerge better than before in order to build the post-crisis period of the pandemic positively,” he said.

(Reporting by Philip Pullella; Editing by Susan Fenton)

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People more important than the economy, pope says about Covid crisis – TheChronicleHerald.ca

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By Philip Pullella

VATICAN CITY (Reuters) – Pope Francis said on Sunday that people are more important than the economy, as countries decide how quickly to reopen their countries from coronavirus lockdowns.

Francis made his comments, departing from a prepared script, at the first noon address from his window overlooking St. Peter’s Square in three months as Italy’s lockdown drew to an end.

“Healing people, not saving (money) to help the economy (is important), healing people, who are more important than the economy,” Francis said.

“We people are temples of the Holy Spirit, the economy is not,” he said.

Francis did not mention any countries. Many governments are deciding whether to reopen their economies to save jobs and living standards, or whether to maintain lockdowns until they are sure the virus is fully under control.

The pope’s words were met with applause by hundreds of people in the square, many of whom wore masks and kept several meters from each other. The square was reopened to the public last Monday. Normally tens of thousands attend on a Sunday.

The last time the pope delivered his message and blessing from the window was March 1, before Italy, where more than 33,000 people have died from the virus, imposed a lockdown. The last restrictions will be lifted on Wednesday.

Francis led the crowd in silent prayer for medical workers who lost their lives by helping others.

He said he hoped the world would come out of the crisis more united, rather than divided.

“People do not come out of a crisis like this the same as before. We will come out either better or worse than before. Let’s have the courage to emerge better than before in order to build the post-crisis period of the pandemic positively,” he said.

(Reporting by Philip Pullella; Editing by Susan Fenton)

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COVID-19 is hastening the green economy, and we are far behind – CBC.ca

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In Newfoundland and Labrador, we immediately need both jobs and training for workers who want to transition out of oil, writes contributor Lori Lee Oates. (Submitted)

This week Premier Dwight Ball, Minister of Natural Resources Siobhan Coady, new Memorial University president Vianne Timmons and two industry associations held a news conference. They called on the federal government to provide subsidies for oil companies in the Newfoundland and Labrador offshore.

Their message demonstrated a fundamental misunderstanding of what has to happen to meet Paris Accord emission reduction targets for 2030. It also ignored the research on where the global economy is going, as other nations prepare green economic stimulus packages.

In May 2018, the International Labour Organization released a report which estimated that 24-million new jobs would be created in the move to a green economy, by 2030.

It also predicted a loss of six million jobs in the oil sector. However, that represents a net gain of 18-million jobs that will be created by this fundamental shift. Green energy is simply more job intensive than the fossil fuel energy sector and a far better bet for the economic future of this province.

What this means for Newfoundland and Labrador is that we need to take steps immediately to ensure we take full advantage of the green economic recovery. We also need to increase training opportunities.

Like any revolution, those who get there first will seize the high ground and become the new centres of excellence. Green energy services are a product that we will be able to export globally, and they will be in high demand for decades to come.

This is an opportunity for us to fully enter the global service economy for the first time in our history.

‘Green energy services are a product that we will be able to export globally, and they will be in high demand for decades to come,’ writes Lori Lee Oates. (Patrick Pleul/dpa via Associated Press)

The writing is on the wall

For some years now, financial analysts such as former Bank of Canada governor Mark Carney and the International Monetary Fund (IMF) have warned of the dangers of ignoring climate change in financial planning.

The COVID-19 pandemic has hastened the move to a green economy. This is likely the best opportunity we will ever have, as a planet, to get on track to meet greenhouse gas emission reduction targets, as outlined by the 2015 Paris Accord.

Even before the pandemic, the IMF was warning against subsidizing the oil industry. A 2019 paper maintained that we must factor in the cost of external factors like natural disasters and health care to calculate the true cost of fossil fuel subsidies.

Furthermore, the IMF found that there was a net economic gain to ending oil subsidies.

Indeed, wildfires in Australia this year are expected to cost $100 billion. There is a very real price tag to failing to deal with climate change. Other costs include drought, starvation, war, pollution and all manner of natural disasters.

Experts have been pressing for jurisdictions that are heavily dependent on oil to diversify. That includes scholars and analysts in this province.

In the absence of an economic update from the provincial government so far this year, best estimates are that Newfoundland and Labrador will run a deficit of $2-3 billion.

In Newfoundland and Labrador, we immediately need both jobs and training for workers who want to transition out of oil. We must insist that the federal and provincial governments prioritize workers over oil companies and their major global contractors.

Prof. Jeff Colgan of the Watson Institute at Brown University has argued that high-priced oil jurisdictions such as Canada will be wiped out of the global industry as part of the post-coronavirus oil shock. Colgan, who is Canadian, also predicted a high level of bankruptcies and mergers in the sector.

While the oil industry has long depended on subsidies, some experts are now urging nations to invest in green energy, rather than recover jobs that will have to be replaced in a few years to meet 2030 climate goals.

One of the findings of the IMF 2019 study was that Canada invests $60 billion annually in oil subsidies. Notably, most of this money goes to oil operators and tier one contractors that are headquartered outside of this country.

Oil subsidies largely do not go to supply and service companies that are home-grown and based in Newfoundland and Labrador. These are also companies that could easily transition into supplying lower carbon energy sectors, with fairly minimal supports.

Frankly, our provincial trade associations should be doing a better job of advocating for transitional funding for local companies, rather than championing the cause of major multinationals.

The fact that the oil sector is in such desperate need of subsidies to survive demonstrates that it is not nearly as lucrative as it claims it to be. The data that proponents present on the economic benefits of oil never factors in the total costs of oil subsidies.

Wildfires in Australia this year are expected to cost $100 billion. (Saeed Khan/AFP/Getty)

The year the world woke up to climate change

Oxford Dictionaries chose “climate emergency” as its word of the year for 2019. We can expect massive shifts in energy sectors globally during the coming decade.

In 2019, 11,000 scientists across the globe signed off on an article in Bioscience, based on climate data from the last 40 years. They recommended the following:

Replacing fossil fuels with low-carbon renewables and cleaner sources of energy. For them this meant that existing fossil fuels should be left in the ground;

  •  Promptly reducing emissions;
  •  Quickly curtailing habitat and biodiversity loss;
  •  Eating mostly a plant-based diet, while reducing global consumption of animal products;
  •  Shifting governance goals from GDP growth to human wellbeing; and
  •  Stabilizing the world’s population. They said family planning services should be available to all people. We must remove barriers to full gender equity and achieve primary and secondary education, as a global norm.

It has become increasingly clear since the Paris Accord was negotiated in 2015 that keeping an increase in global warming to 2 C is not enough.

We also now know that we must keep global warming to 1.5 C above pre-industrial levels in order to prevent irreparable damage to the natural environment. Last year ended with a global average temperature of 1.1 C above pre-industrial levels.

UN Secretary-General António Guterres has warned that we are currently way off track in meeting either the 1.5 C or 2 C targets that the Paris agreement called for.

Time is quickly running out for us to avert the worst impacts of climate disruption.

Canada, notably, is a signatory to the Paris Accord and has ratified it at home.

A pumpjack works at a well head on an oil and gas installation near Cremona, Alta. (Jeff McIntosh/The Canadian Press)

The future is now

Increasingly, there have been calls for green energy stimulus spending since the economic downturn caused by COVID-19.

The Oxford Review of Economic Policy has accepted astudy which surveyed 231 financial experts across central banks, finance ministries, and economics experts throughout the G20.

These experts identified five areas of economic stimulus which could displace the fossil fuel intensive economy, rather than entrench it. These include:

  •  Building efficiency retrofits;
  •  Investment in education and training;
  •  Natural capital investment;
  •  Clean research and development (this is NOT oil R&D).

Notably, our government is cutting post-secondary education, in both the university and college systems, at a time when we need to be re-training people for the green economy.

The study also found that without a green recovery, it will be nearly impossible to meet the goals of the Paris Accord. However, if the world comes together on green stimulus, this will be nearly sufficient to mitigate the most disastrous impacts of climate change that are predicted within the next 10 years.

The European Union is now poised to announce the world’s greenest economic recovery package. Proposals include:

  •  Up to 80-billion euros to boost electric vehicle (EV) sales;
  •  Doubling investment in charging networks; an option to exempt EVs from value-added taxes;
  •  91-billion euros a year to seal up drafty buildings;
  •  Plans to offer homebuyers green mortgages (for energy efficient homes);
  •  An annual 10-billion euros to support renewal energy and hydro infrastructure.

We are already behind on retraining

Governments and oil companies should have been retraining and transitioning oil employees for some years now.

In Newfoundland and Labrador, we immediately need both jobs and training for workers who want to transition out of oil. We must insist that the federal and provincial governments prioritize workers over oil companies and their major global contractors.

In their stimulus response, they must also prioritize the green economy over the oil economy, as many nations are already doing. If we do this right, we can become a green energy centre of excellence in the global environment.

However, for that to happen, we must act on building the green economy right now.

Read more from CBC Newfoundland and Labrador

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