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The economy is finally recovering from the coronavirus, but the ill-effects aren’t going away for a long time – MarketWatch

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If the end of the great toilet paper shortage is any indication, the U.S. economy has already bottomed out and a fragile recovery is underway.

After months of being hard to find, toilet paper is increasingly available on supermarket shelves and at popular online sites such as Amazon. Americans aren’t hoarding supplies as much or desperately seeking where to find rolls except in a diminishing number of coronavirus hotspots.

Toilet paper is not the only cue.

All 50 states have partly reopened their economies, people are slowly returning to work, consumer confidence has crept higher and Americans are driving further and getting out of their house more often, according to social mobility trackers. Signs of revival are everywhere.

“The economy has bottomed,” said Steve Blitz, chief economist of TS Lombard.

See:MarketWatch Coronavirus Recovery Tracker

The big unknown — what’s on everyone’s mind — is how quickly the U.S. recovers from the shock of a coronavirus pandemic that ignited the fastest and deepest economic slump in modern history. The Wall Street forecasting firm IHS Markit predicts gross domestic product in the second quarter will sink by a whopping 40% at an annualized pace, dwarfing anything the U.S. has witnessed before.

There’s little doubt among economists the U.S. will experience a burst of growth before the end of the year. Blitz likened the economy to a rubber duck being held under water in a bathtub. When it’s released, it briefly shoots up in the air — before falling back down.

That’s the most likely path of the recovery, analysts say. The U.S. will get a pop after most of the coronavirus restrictions are lifted, but the economy won’t be restored to pre-crisis levels for at least a few years.

The biggest barrier naturally is the virus itself. So long as a vaccine or treatment remains elusive, many Americans are likely to continue social distancing and avoiding large crowds on their own volition. Although the vast majority of people who have contracted the virus have survived, a recent poll by Harris Interactive found that 50% of Americans think they will die if they get COVID-19.

“A full recovery in the economy is going to hinge on how well society gets the pandemic under control,” said Boston Federal Reserve President Eric Rosengren. “If consumers are afraid to eat out, shop, travel, a relaxation of laws may do little to bring back customers and thus jobs.”

Read:There’s a limit on what the Fed can do to help, Rosengren says in MarketWatch interview

Absent a cure, large and critical segments of economy will require sweeping changes just to survive that could result in the loss of millions of jobs. These industries include airlines, hotels, retail stores and restaurants.

The restaurant-booking site OpenTable, for example, predicts one in four restaurants are likely to close because of the virus. And airlines that typically bank on selling at least 80% of their seats to make money will have to cut flights, amenities, and jobs if only 60% of their seats are filled in a post-pandemic world. Those are just a few of the nightmare scenarios.

See:TSA passenger travel totals

For now millions of workers in these fields are on furlough and getting paid unemployment benefits by the government. Others who work for idled small businesses have been put back on company payrolls through an emergency federal program that provides forgivable loans.

Yet if these job losses turn from temporary to permanent it will make a recovery all the harder, keeping unemployment in the double digits at least until 2021.

The jobless rate rose unofficially to almost 20% in May, according to a government analysis, from just 3.5% three months ago. More than 20 million people lost their jobs in April alone.

Read:Great Depression 2020? The unofficial U.S. jobless rate is at least 20%—or worse

Feeling growing public pressure and worried about falling tax revenue, every state is reopening their economies ore relaxing restrictions to try to limit the damage

“The longer stay-in-place restrictions prevail, the more likely job losses are permanent rather than temporary,” said economist Stephen Gallagher of Societe Generale.

There’s growing evidence that federal help is working for small business and state reopenings. The number of Americans in early May who were collecting unemployment benefits, known as continuing claims, actually fell for the first time since the crisis began.

“The much slower rise in continuing claims suggests that people are now beginning to return to work,” chief U.S. economist Paul Ashworth of Capital Economics said.

The Trump White House, with an eye toward the 2020 presidential elections, is pushing the states to reopen even faster. Yet most economy watchers, including Federal Reserve Chairman Jerome Powell, suggest Washington will have to spend even more than the $3 trillion it has already approved.

“This is the biggest shock we’ve seen in living memory. The question that looms in the air is, is it enough?” Powell told senators at a hearing on Tuesday about emergency loans for business.

The next pivotal event for the economy is likely to come by midsummer when federal programs that offer extra unemployment benefits and subsidies to keep small business workers on payrolls expire. If not enough workers are able to return to their jobs because business is slow, Congress might need to add more money to the pot to prevent more mass layoffs and another shock to the economy.

Local and state governments are also coping with unprecedented declines in tax revenue and are being forced to lay off scores of workers. Democrats and Republicans are divided over whether to help them out, but if the crisis gets worse, a reluctant Trump White House might have to come to the rescue.

By the early fall, the fear over the virus returning is another potential obstacle on the path to recovery. If the disease starts to spread again and forces more state lockdowns, all the progress made during the warmer months could be lost.

Even if the virus remains contained in the fall, the lingering threat all but ensures states will retain some restrictions, limiting the size and speed of the rebound.

“A slow reopening will limit a renewed viral outbreak, but will also prolong the stress on workers and firms,” economists at Northern Trust predicted.

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Business

A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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