Canada’s summer rebound may fizzle out this fall as months of high unemployment and uncertainty for businesses take their toll, according to the global chief economist of Manulife Investment Management.
The country’s economy expanded 3 per cent in July, Statistics Canada estimated Friday, following record 6.5 per cent growth in June. Key to that recovery has been emergency COVID-19 aid from governments to households: An 88 per cent jump in transfers from government in the second quarter pushed up income and savings.
But while money is still flowing in Canada, the U.S. has hit a “fiscal air pocket” as Congress fights over the next stimulus bill, said Manulife’s Frances Donald. Even with government help, the pandemic has done major economic damage, she said, noting that 1.3 million people need to be hired in Canada before the labor market is back to pre-pandemic levels.
“We should not be tricked into complacency that so far the recovery looks fine,” Donald said in an interview. “Those who have been unemployed have now been unemployed for much longer than they were in April. Companies that have been hanging on by a thread have less thread to hang onto.”
The second quarter was the worst on record for Canada’s economy, which contracted 38.7 per cent on an annualized basis as businesses shut down in March and April to contain the spread of the virus. Economists project 35 per cent growth in the third quarter because most industries are now operating at closer to normal capacity.
But the momentum will fade and Canada will enter a “stall-out period” in September or October, Donald said, as social distancing measures continue to weigh on sectors such as travel.
Income from foreign visitors to Canada fell 62 per cent to $13.6 billion (US$10.4 billion) in the second quarter of 2020 compared with the same period last year, according to data Statistics Canada.
“This is a services-based recession. It requires a services-based recovery,” she said.
“Canada likely has a little bit more time than the United States because there’s just more fiscal support in Canada than there is in the U.S. right now, and the Canadian economy is slightly less services-based than the U.S. economy.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
