(Bloomberg) — President Joe Biden is trying to capitalize on a sudden spate of positive economic news to turn Democrats’ biggest political liability into an unlikely election-year selling point.
Falling gas prices, two major legislative victories and early signals that red-hot inflation may be easing have boosted Democrats’ once improbable bid to retain their House and Senate majorities in the November midterms.
Biden plans to argue Tuesday that he and his fellow Democrats have helped steer the economy back to firmer footing during a White House ceremony touting a sweeping new climate, energy and health care law dubbed the “Inflation Reduction Act.” The saliency of that message could be helped — or undercut — by the latest government inflation data, due for release just ahead of the event.
US equities climbed Monday on expectations that the Labor Department report will show consumer prices slowing in August, though the optimism could prove short-lived if the data doesn’t meet forecasts. Economists surveyed by Bloomberg project the Consumer Price Index reading will drop 0.1% from July but remain historically high, rising 8% from a year ago.
Also threatening to upend Biden’s strategy is the possibility of a rail strike that could snarl supply chains, disrupt agricultural deliveries and cost the US economy more than $2 billion a day. The Biden administration is pressuring labor unions and freight-rail operators to agree on a new contract before a Friday deadline.
Democrats have made some headway in eroding the advantage that inflation has afforded Republicans in the midterms, said Brian Stryker, a partner at Democratic polling firm Impact Research, which aided Biden’s 2020 presidential campaign and consults with gubernatorial and congressional candidates.
Biden on Monday issued an executive order laying out priorities for the law’s execution, including reducing greenhouse gas emissions, building US clean energy capacity and creating jobs. The order also establishes a White House office on clean energy innovation and implementation.
The White House’s effort to shift the narrative included Biden’s visit Friday to a construction site in Ohio, where Intel Corp. is building a new plant to make computer chips. The trip gave the president an opportunity to highlight legislation signed into law last month aimed at boosting domestic semiconductor manufacturing.
“Since I took office, our economy has created nearly 10 million new jobs, more than 668,000 manufacturing jobs — proof of point that ‘Made in Ohio’ and ‘Made in America’ is no longer just a slogan,” Biden said at the event. “It’s a reality today. And it’s just beginning.”
The president also has pivoted away somewhat from the economy in recent weeks to highlight the threat he contends Republicans pose to democracy, most notably during a Sept. 1 prime-time speech in which he said his predecessor, Donald Trump, and Republicans who back him “represent an extremism that threatens the very foundation of our republic.”
Read more: Biden Demonizes GOP in Midterm Pivot From Uncertain Economy
Republicans, for their part, plan to keep the focus on the still-high cost of groceries, housing and other day-to-day items, even as Democrats try to use their recent accomplishments to transform the state of the economy into less of a political liability.
Democrats should aim for a repeat of 2012, when President Barack Obama was able to persuade enough voters to overlook an economic drawback — then, high unemployment — and grant him a second term, Stryker said.
“Voters thought Obama was trying and that some of those efforts would bear fruit,” he said. “That is where Democrats need to get voters.”
Biden’s overall approval rating increased six percentage points to 44% in late August, according to Gallup — his highest level in a year. The president still earns especially low marks for his handling of the economy, but the proportion of Americans who cited inflation as their top concern headed into the midterms dropped from 37% to 30% in a Sept. 8 NPR/PBS NewsHour/Marist poll.
Biden’s recent legislative victories “are meaningful both substantively and politically and have marginally improved his approval ratings and attitudes about the direction of the country,” Doug Sosnik, former White House political director under President Bill Clinton, wrote in a recent memo.
“Historical political gravity is on the Republicans’ side, but the Democrats head into the fall election with a stronger counter-narrative than they had in the spring,” Sosnik wrote.
(Updates with Biden signing an executive order, in seventh paragraph.)
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
