(Reuters) – The coronavirus pandemic threw tens of millions of Americans out of work, ended the longest U.S. economic recovery on record and undermined a key argument for President Donald Trump’s re-election.
Now, the Republican president and his Democratic opponent in the Nov. 3 election, Joe Biden, have to convince Americans who can get the economy back on track.
As part of his broader economic plan, Biden is expected to propose new policies as soon as this week to increase jobs in childcare, elder care and education.
Here is how the candidates want to revive the economy:
BACK ON TRACK
Since the COVID-19 outbreak, Trump has signed legislation to flush the economy with trillions of dollars in onetime aid to businesses, individuals and local governments.
The president also pushed states to reopen as quickly as possible, even as infections spiked.
Biden has cautioned against reopening the economy without first ramping up coronavirus testing. The former vice president, who oversaw U.S. stimulus spending after the 2008 financial crisis, says households – as well as local governments – need more support to get through the shutdown.
While Trump has said further stimulus measures must include a payroll tax cut, Biden wants Washington to offer states more support in paying for unemployment benefits.
TAXES AND WAGES
The president, a former real estate developer, has touted the 2017 tax cuts he signed into law as stimulating economic growth. Cutting payroll taxes would boost paychecks of most working Americans.
Biden criticized the 2017 tax cuts as giving too many benefits to the wealthy and corporations. He has pledged to reverse some of those cuts, raising the marginal tax rate on the highest income earners back to 39.6%, from 37%, while also lifting investment profit taxes. He also supports raising the national minimum wage to $15 an hour from $7.25 and expanding some tax credits for lower-income workers.
“We have to build a much more inclusive, much more equitable middle class and an economy that everybody – everybody – gets a fair shot at,” Biden said in April.
The Trump campaign is attacking the policy of raising taxes while the economy struggles to recover.
TRADE
In a return to a core issue of his 2016 presidential campaign, Trump is telling voters he wants to boost domestic manufacturing. He stepped up verbal attacks on Beijing as his administration accelerates an initiative to remove industrial supply chains from China.
He has also argued that America’s difficulties in procuring medical supplies internationally during the pandemic are another reason to encourage U.S. companies to avoid offshoring.
“If one thing comes out of this, more than anything else, is that we should make product in the United States,” Trump said in April.
Biden offered his own made-in-American manufacturing plan in July. He pledged to spend $700 billion on American-made products and industrial research, which he said would give at least 5 million more people a paycheck during a job-killing pandemic.
As a senator, Biden voted for the North American Free Trade Agreement (NAFTA), a trade pact that helped Mexican factories gain access to the U.S. market.
Biden has criticized Trump’s tariff war with China as bad for U.S. consumers and farmers. In 2018, he called for “retaliation” on countries like China which he has said subsidize industries and allow intellectual property theft.
GREEN INVESTMENTS
Biden said he would spend $2 trillion over four years to improve infrastructure, create zero-emissions public transportation, build sustainable homes and create clean-energy jobs.
Trump advocates more spending on U.S. roads, bridges and airports, too, but has signaled little appetite for making “green” investments.
(Reporting by Trevor Hunnicutt in New York and Jason Lange in Washington; Editing by Colleen Jenkins and Jonathan Oatis)
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
