Connect with us

Economy

A slow September for the U.S. economy: Morning Brief – Yahoo Canada Finance

Published

 on



<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Friday, September 18, 2020” data-reactid=”16″>Friday, September 18, 2020

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET.&nbsp;” data-reactid=”17″>Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Subscribe” data-reactid=”18″>Subscribe

Things could be worse, but this doesn’t make them good.

The U.S. economic recovery slowed in September, according to economists.

But given the absence of new stimulus and the continued spread of COVID-19, this growth-at-a-slower-pace outcome suggests the recovery may continue even in the absence of a new stimulus package.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="And the fact that the economy isn’t in an outright contraction is a nice upside surprise given that fresh stimulus had been seen as essential for any recovery to continue just a few months back.” data-reactid=”22″>And the fact that the economy isn’t in an outright contraction is a nice upside surprise given that fresh stimulus had been seen as essential for any recovery to continue just a few months back.

“The pace of economic recovery has slowed in the last month, but that is arguably still an impressive result given the surge in coronavirus cases over the summer, and the more recent expiry of the enhanced unemployment benefits,” said Paul Ashworth, an economist at Capital Economics in a note on Thursday.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Retail sales, for instance, are back above pre-pandemic levels. But consumption in the services sector — such as at restaurants, where much of current unemployment is focused — has slowed at levels well below those that prevailed last year.” data-reactid=”24″>Retail sales, for instance, are back above pre-pandemic levels. But consumption in the services sector — such as at restaurants, where much of current unemployment is focused — has slowed at levels well below those that prevailed last year.

September’s data also showed a temporary pop from the Labor Day holiday, with economists at Bank of America Global Research noting that seated diners, according to OpenTable and TSA passenger data, both took a step back last week after a pop around the holiday.

Like Capital Economics, however, Bank of America also sees a recovery that continues to be quite resilient. “Bottom line: Labor Day has distorted the signal from many of the high frequency indicators that we track,” the firm said in a report published Wednesday.

“However, the New York Fed weekly economic index and Dallas mobility and engagement index continue to signal that the recovery has continued in September, but there is still a long road ahead before the economy is fully healed.”

Over at Oxford Economics, Gregory Daco notes that the firm’s proprietary recovery tracker index fell for week ended September 4 — the most recent week for which the firm has complete data — though most of this decline was due to the selloff in markets that tightened financial conditions.

Daco is also tracking concerning signs in the labor market, however, where gains slowed in early September at both the national and regional level.

“Employment continued to climb on stronger job openings and increased employment at small businesses, but momentum slowed,” Daco writes. Adding that, “regional labor market recoveries have lost strength, posing a risk to consumer spending absent additional fiscal aid.”

The labor market recovery lost momentum in early September while overall activity has been resilient even amid the absence of additional fiscal stimulus. (Source: Oxford Economics)
The labor market recovery lost momentum in early September while overall activity has been resilient even amid the absence of additional fiscal stimulus. (Source: Oxford Economics)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But given the mid-summer conversation about a “benefits cliff” the economy has now walked off with the CARES Act expiring at the end of July, a slowing but not contracting economy is a positive and surprising development.” data-reactid=”42″>But given the mid-summer conversation about a “benefits cliff” the economy has now walked off with the CARES Act expiring at the end of July, a slowing but not contracting economy is a positive and surprising development.

Which suggests a more durable recovery is possible if either a vaccine is available earlier than expected or fiscal stimulus is made available to consumers in the months ahead.

But these positive developments are far from an all-clear that the pandemic-induced downturn is behind us and that further diligence isn’t warranted.

“Activity in the housing sector has returned to its level at the beginning of the year, and we are starting to see signs of an improvement in business investment,” Federal Reserve Chair Jerome Powell said Wednesday. “The recovery has progressed more quickly than generally expected, and forecasts from FOMC participants for economic growth this year have been revised up since our June Summary of Economic Projections.”

“Even so, overall activity remains well below its level before the pandemic and the path ahead remains highly uncertain,” Powell said.

Adding: “A full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="By&nbsp;Myles Udland, reporter and co-anchor of&nbsp;The Final Round. Follow him at&nbsp;@MylesUdland” data-reactid=”52″>By Myles Udland, reporter and co-anchor of The Final Round. Follow him at @MylesUdland

What to watch today

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Economy” data-reactid=”54″>Economy

  • 8:30 a.m. ET: Current account balance, second quarter (-$160.0 billion expected, -$104.2 billion during the first quarter)

  • 10:00 a.m. ET: Leading index, August (1.3% expected, 1.4% in July)

  • 10:00 a.m. ET: University of Michigan Sentiment, September preliminary (75.0 expected, 74.1 in August)

Top News

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="European stocks dip as infections rise and central banks ‘sit on their hands’ [Yahoo Finance UK]” data-reactid=”60″>European stocks dip as infections rise and central banks ‘sit on their hands’ [Yahoo Finance UK]

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="TikTok’s owner is getting surer Beijing will OK U.S. deal [Bloomberg]” data-reactid=”61″>TikTok’s owner is getting surer Beijing will OK U.S. deal [Bloomberg]

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Bank of England stokes negative interest rate speculation [Yahoo Finance UK]” data-reactid=”62″>Bank of England stokes negative interest rate speculation [Yahoo Finance UK]

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In Wisconsin, Trump announces $13 billion in farm aid [Reuters]” data-reactid=”63″>In Wisconsin, Trump announces $13 billion in farm aid [Reuters]

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="YAHOO FINANCE HIGHLIGHTS” data-reactid=”64″>YAHOO FINANCE HIGHLIGHTS

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Whole Foods CEO does not think online grocery will remain the norm post-pandemic: ‘Food is different’” data-reactid=”65″>Whole Foods CEO does not think online grocery will remain the norm post-pandemic: ‘Food is different’

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Google-backed ‘plumber’ Amwell spikes in debut, IPO a barometer of booming telehealth market” data-reactid=”66″>Google-backed ‘plumber’ Amwell spikes in debut, IPO a barometer of booming telehealth market

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Warren and Schumer urge student debt cancellation of up to $50,000 for all federal borrowers” data-reactid=”67″>Warren and Schumer urge student debt cancellation of up to $50,000 for all federal borrowers

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”69″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Find live stock market quotes and the latest business and finance news” data-reactid=”70″>Find live stock market quotes and the latest business and finance news

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For tutorials and information on investing and trading stocks, check out&nbsp;Cashay” data-reactid=”71″>For tutorials and information on investing and trading stocks, check out Cashay

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Skills for the new economy – The Globe and Mail

Published

 on


Event summary produced by The Globe and Mail Events team. The Globe’s editorial department was not involved.

As the digital transformation gains velocity though the pandemic, business leaders are assessing the skills most essential for future-ready workforces. The Globe and Mail hosted a webcast on October 13 to bring business and academic leaders together to discuss the knowledge employees will need to succeed in the shifting economy. The webcast was presented with support from Athabasca University. Sean Stanleigh, head of The Content Studio at The Globe and Mail, moderated the panel discussion.

Highlights from the discussion appear below the webcast recording.

Story continues below advertisement

[embedded content]

Highlights from the discussion:

1). The nature of work is changing

Much of the work we currently do is process or task focused but that will change with the development of technologies such as artificial intelligence (A.I.), said Joe Cox, Canada research chair in digital disruption and organizational transformation with Athabasca University. With A.I. in the picture, they will shift their focus to figuring out the business problems that need solving and how best to pose these problems to the technology systems. The role of managers will also change, he added, skewing away from their current priority of predicting what will happen in the future, to making good judgements.

2). Training is vital for success

The digital economy requires individuals who have specific technology skills, especially in the area of cybersecurity, said Claudette McGowan, global executive officer for cybersecurity with TD Bank. She pointed out the skills shortfall in cybersecurity and noted it could be a good opportunity for mid-career individuals to pivot into a growing field by taking training at an academic institution or privately. She said reverse mentorships are also valuable, providing an opportunity for more senior staff to shore up their skills in emerging technologies, social media and data analytics.

3). Soft skills and micro-skills will dominate

Nicole Verkindt is a tech entrepreneur and founder of OMX, a procurement technology company. She said new hires at OMX fall into two camps. The first relates to soft skills, including judgement ability, in order to interpret data from technology programs. Diversity of backgrounds and experiences is also important. The second area relates to specific skills. In the past, an undergrad degree in business might be sufficient to achieve a job in marketing, for example. Increasingly, however, she is looking for candidates with niche skills, such as experience with HubSpot or data analytics tools. An entrepreneurial mindset is also highly valued, she added.

Story continues below advertisement

Watch the full webcast above for specific examples of the knowledge, experience and skills of most importance for success in the digital economy.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Are more steps needed to help the economy recover? – CityNews Toronto

Published

 on


* profilePhotoCustom *

* public_profileBlurb *

* public_displayName *

* public_name *
* public_gender *
* public_birthdate *
* public_emailAddress *
* public_address *
* public_phoneNumber *

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

We saved our economy in Sweden. But too many people died. – The Washington Post

Published

 on


When the coronavirus pandemic gained momentum in the spring, Sweden chose a less restrictive containment strategy than most other countries did, including its Nordic neighbors. Some medical experts and economists, in and out of Sweden, have criticized its policy for being too lenient. Others, from Elon Musk to National Review columnists, have hailed it as a role model for allegedly keeping the economy open, staving off the consequences of a harsher lockdown. President Trump’s medical adviser Scott Atlas has advocated that the United States adopt the Swedish approach to the pandemic.

Sweden’s strategy indeed likely helped the economy — but this came at too high a cost, in terms of lives lost. Taking a similar approach in the United States would, in all probability, be even more costly, because unlike Sweden and other European countries, the United States does not have a centralized, publicly funded health-care system with universal coverage.

Observers outside of Sweden have often misunderstood its handling of the pandemic. It is true that the government never imposed a formal lockdown and that day-care centers and elementary schools remained open. But the Public Health Agency has strongly recommended social distancing, working from home and avoiding unnecessary travel, among other precautions; compliance was high. The agency instructed people above 70 years of age to avoid socializing with others, and visits to old-age homes were banned. The government prohibited public gatherings of more than 50 people. The Swedish summer holidays, when many people leave the cities and towns for their summer houses in the countryside, may have worked as an informal lockdown, slowing the spread of the virus.

Even for observers within Sweden, it has been difficult to ascertain the rationale behind its pandemic strategy. Throughout, the Swedish Public Health Agency remained reticent about the motives behind its policy approach. Officials did not explain how they weighed economic considerations and wider public health concerns, and whether they drew up policies with an objective of achieving herd immunity or based on a worry that rigorous restrictions would be unsustainable.

It might be most accurate to characterize the Swedish “strategy” as one that began with misjudgments of the risk of large-scale spread and the extent of asymptomatic contagion. The health agency did not try to dissuade families from going skiing in the Alps during the winter holidays in late February, though reports regarding an outbreak in northern Italy soon surfaced. A recommendation to avoid unnecessary travel to that region did not come until March 6. When travelers from the skiing resorts returned, they were not quarantined. In media interviews, representatives of the health agency even criticized employers who, on their own initiative, quarantined personnel returning from hot spots. The other Nordic countries imposed limits on public gatherings of five to 10 people in mid-March, but Sweden did not introduce its much higher limit until the end of the month. Even as infections surged in April and May, test-and-trace-programs were not boosted, on the grounds that they would not be effective in a situation with large virus spread. These programs began to be substantially expanded only in the late spring. Very recently, in mid-September, the Public Health Agency recommended, for the first time, that people should quarantine themselves if someone in their household is infected.

What has been the economic effect? Like other countries, Sweden has been hit hard economically. During the first six months of 2020, the gross domestic product fell by 8.5 percent. Unemployment is projected to rise to almost 10 percent in the beginning of next year.

The drop in GDP is considerably smaller than in southern European countries and the United Kingdom, and one to three percentage points smaller than in Denmark, Germany and the United States. The GDP fall, however, is larger than in Finland and Norway. It’s difficult to meaningfully evaluate the impact of different coronavirus strategies using this metric, because of the differences between the countries’ economic structures. For example, Sweden depends less on tourism, an industry hit particularly hard by the pandemic, than do Italy and Spain. Still, the lenient Swedish approach to the pandemic, involving fewer formal restrictions, likely did dampen the economic impact of the pandemic.

But the death toll here has been much higher than in our Nordic neighbors. As of Tuesday, the cumulative number of deaths from coronavirus infections per million people was 52 in Norway, 64 in Finland, and 118 in Denmark, according to Johns Hopkins University. In Sweden it was 581 — not that far below the United States with 673. Comparisons of infection rates are less reliable because of differences in the testing volume, but here, too, Sweden stands out, relative to its neighbors. Registered cases in Sweden are slightly above 106,300, compared with around 13,800 in Finland and 16,600 in Norway — each with about half the population of Sweden.

Have the economic gains from the Swedish strategy been worth the cost? The following are crude back-of-the-envelope calculations.

Assume that the differential Swedish approach dampens the GDP fall this year by 1 percentage point. This represents a gain of approximately $5.6 billion. Also suppose that the approach has caused 5,000 extra deaths — a reasonable guess from comparisons with other Nordic countries. How could one estimate that loss of life in economic terms? The value of a statistical life, used by the Swedish Transport Administration in its cost-benefit analyses of investment in traffic security, is approximately $4.6 million. Using this number, the economic cost of lost lives would be as high as $22.9 billion — clearly outweighing the benefits from the smaller GDP fall. One might argue that the value of lost lives should be set much lower, as the vast majority of deaths have been among elderly people, with fewer years left to enjoy life: 89 percent of the dead in Sweden have been above 70 years of age, and 67 percent above 80. One reaches the break-even point in my calculation if one lowers the value of an average life lost to $1.14 million. For the Swedish approach to be “profitable,” the average life lost must be valued lower than that.

A more complete analysis should consider other factors as well: future health consequences for covid-19 patients, the crowding out of other medical treatments during the pandemic, and the benefits of maintaining a more normal life and keeping more people attached to the labor market. But even a simple calculation, looking only at lives lost, suggests that the costs of the so-called Swedish “strategy” were too high. One thing Sweden may perhaps have done right was to keep day-care centers and elementary schools open. Closing them would have prevented many parents from working, at great cost to their economic output and their livelihoods, and to pupils’ opportunities to learn. There appears to be no evidence that these institutions played an important role in spreading the virus in Sweden: An early study found that day-care personnel and teachers were not at higher risk of infection compared with the labor force in general. There is clearly a need, however, for more research into the potential role of schools in viral spread, in Sweden and elsewhere.

The jury is still out on how well Sweden copes with the pandemic in the longer run: Case numbers, hospitalizations and deaths fell to low levels in August and early September but are now rising again. Based on the numbers so far, however, it appears that Sweden’s failure to adopt a more cautious approach in the early phase of the pandemic caused an unnecessarily large number of deaths, most of them among the elderly. In my view, one would have to attach an unreasonably low value to their lives to conclude that the economic gains outweighed the human losses.

Read more:

Let’s block ads! (Why?)



Source link

Continue Reading

Trending