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Canada will exit pandemic with lower potential, Wilkins says – BNN

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The Bank of Canada’s top deputy said the country is likely to come out of the pandemic with a lower outlook for potential growth and permanent labor force scarring, and that conventional wisdom must be challenged to find solutions.

In a speech Thursday, Senior Deputy Governor Carolyn Wilkins reiterated the central bank projects potential output will be 3 per cent lower by the end of 2022 versus their pre-pandemic forecast, with weak capital investment accounting for the bulk of the reduced potential. She said policy makers and businesses will need to think outside the box to find solutions.

“The pandemic has damaged the potential for Canada, and other countries worldwide, to generate sustainable economic activity,” Wilkins said via webcast to the Munk School of Global Affairs and Public Policy. “We need to set our sights higher to help businesses create good jobs and to make high debt loads more manageable.”

READ: Powell says coming months to be challenging as virus spreads

Investments in areas such as education, infrastructure, technology and greening the economy would help potential output growth, Wilkins said, adding that education improves social mobility and skills in the workforce.

Other examples of policies that promote both social and economic goals are childcare, which boosts female participation in the workforce and the government’s wage subsidies, which allow employer and employee connection to remain intact.

“How exactly these are designed, however, is the subject of much debate.” said Wilkins, whose last day at the bank will be Dec. 9. She will be stepping down from her role as senior deputy governor after nearly seven years.

The lower profile for potential output means a significantly diminished ability to generate goods, services and incomes on a sustainable basis, Wilkins said. “And many of those scars could become permanent without deliberate actions from all of us.”

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Gold price ignores better-than-expected U.S. weekly jobless claims data – Kitco NEWS

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(Kitco News) –    The gold market is holding on to strong gains for the third straight session even as fewer American workers apply for first time weekly unemployment benefits.

Thursday the U.S. Labor Department said that weekly jobless claims fell by 75,000 to 712,000, down from the previous week’s revised estimate of 787,000 claims.

The latest labor market data beat economists’ estimates as consensus forecasts called for initial claims to be round 775,000.

The gold market is seeing little reaction to the latest economic report as it continues to see strong technical buying after November’s dismal performance. February gold futures last traded at $1,841.50 an ounce, up 0.62% on the day.

After bouncing off critical support below $1,800, gold prices have rallied 3.5% in the first three days of December.

The four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it flattens week-to-week volatility – fell to 739,500, down by 11,250 claims from the previous week.

Continuing jobless claims, which represent the number of people already receiving benefits, were at 5.52 million during the week ending Nov. 21, down by 569,000 from the previous week.

According to some economists, markets are taking the latest labor market data with a grain of salt as they wait for Friday’s nonfarm payrolls report for October. According to consensus forecasts, economists are expecting that 500,000 jobs were created in November.

However, downside risks for the labor market are growing after private payrolls processing company ADP reported, Wednesday, weaker than expected job growth last month.

ADP said that 307,000 jobs were created, well below consensus forecasts calling for gains of around 433,000 jobs.

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Stock market news live updates: Stocks hold near record levels after jobless claims top estimates – Yahoo Canada Finance

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The Canadian Press

Ho, ho – Whoa! Virus keeping most Santas at a distance

MIAMI — Brad Six becomes Santa Claus, pulling his black boots over his red pants in the office of a Miami outdoor supply company. It’s hot, so he forgoes the traditional heavy jacket for a lightweight vest and grabs his Santa hat.But before sliding it on, the gray-bearded 61-year-old dons a plastic face shield and then takes his chair positioned behind a plexiglass sheet.”Getting paid is nice, but to get your battery recharged and to really get something lasting out of it requires interacting with the kids — you don’t get a lot of that this year,” said Six, who first portrayed Santa 35 years ago.This is Santa Claus in the Coronavirus Age, where visits are conducted with layers of protection or online. Putting hundreds of kids daily onto Santa’s lap to talk into his face — that’s not happening for most. The physical attributes that make the perfect Santa align perfectly with those that make COVID-19 especially deadly.“Most of us tick all the boxes: We are old, we are overweight, we have diabetes and if we don’t have diabetes, we have heart disease,” said Stephen Arnold, the president of IBRBS, an association formerly known as the International Brotherhood of Real Bearded Santas.That has spurred creativity in Santa’s workshops. Santas conducting in-person visits are using some combination of masks, the outdoors, barriers and distance for safety. Others are doing virtual visits, where children chat with Santa online for prices typically ranging from $20 to $100, depending on the length and extras, such as whether customers want a recording. Some Santas are taking the season off.“Santa safety is our No. 1 concern” and negotiated into every contract, said Mitch Allen, president of HireSanta, one of the nation’s largest agencies. He said the pandemic initially dried up his business, but it bounced back, especially online.The average Santa makes $5,000 to $10,000 during a normal season, Allen said. That’s a welcome bonus for men often retired on a fixed income, but many Santas say revenue is down as corporate parties and other lucrative gigs evaporated.Jac Grimes, a Santa in Greensboro, North Carolina, gave up home visits, about a third of his business. He did it not just for his own health, but to prevent becoming a superspreader, fearing he’d pass the virus from one family to the next.At a farmers market he annually works, Grimes and his wife dress up as Santa and Mrs. Claus and sit in a parking lot where they to talk to people who remain inside their cars. Some homeowners associations are moving their annual Santa-visitation parties outdoors; Grimes will arrive in his red convertible to greet the crowds from afar.One of the hardest adjustments Santas have made is wearing masks that hide their painstakingly grown beards.“Santa performers are fairly vain people — if they are good,” Grimes said.The virus has many Santas and parents turning to virtual visits, which are booked through each Santa’s personal website or agencies like Allen’s. That often has Santas turning to their children and others for help mastering the computer skills needed.“It has been a challenge,” said Christopher Saunders, a Santa performer in Tool, Texas, a small town near Dallas.But Saunders and others say virtual sessions are a good if imperfect substitute for in-person visits. Parents fill out questionnaires, allowing performers to personalize their patter, and a side benefit is that the sessions aren’t rushed. Many Santa mall visits last no more than two minutes to keep the line moving.“You get a different energy,” Saunders said of the virtual visits. “You can see the child’s expressions, as pure as they are.”Jim Beidel, a Santa performer near Seattle, said knowing the children’s personal stories, such as their friends and school, helps Santas sell their Christmas magic.“It really enhances the engagement, the suspension of disbelief, especially among the older children,” he said.But even Santas with the best gigs are hurting. Howard Graham usually portrays Santa in the grand foyer of New York’s Radio City Music Hall during its Christmas show featuring the Rockettes. That’s gone, so he’s doing virtual visits and five days with a historic railroad in Pennsylvania. Still, he’s taking a financial and emotional hit.“I love what I do … bringing them (children) a little bit of smiles and hope,” said Graham, who has played Santa at Radio City for eight years. “I am going to do what I can not to change that.”That was also Six’s goal as he settled recently into Santa’s throne for a three-hour shift at Miami’s Bass Pro Shops.As families sat in front of the plexiglass for photos, Six tilted his head so his face shield didn’t reflect the camera’s flash. He cheerfully waved children around the plexiglass so they could tell him their wish list, keeping them 6 feet (1.8 metres) back. As he wished them a Merry Christmas, an elf swooped in with disinfectant, wiping the plexiglass and bench before the next group sat.Six said the arrangement is “a little easier physically on Santa’s back because he doesn’t have to pick anybody up, but it’s not as enjoyable because Santa doesn’t get the interaction he normally gets.”But for families, sitting with Santa, even if behind a shield, is a bit of normalcy in abnormal times.Paul and Sarah Morris and their children, 5-year-old Theo and Sophy, 4, were among the first to visit Six that night. An Air Force family visiting from Hawaii, the Morrises cajoled their children into hugging for their photo. “Stop wiggling,” Theo said, scolding his sister before each sibling told Santa their Christmas wish. Sophy wanted candy; Theo, a remote control Ford Mustang.“This is definitely different,” Sarah Morris said of the setup, “but the kids are excited and that’s what matters.”Terry Spencer, The Associated Press

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Royal Bank of Canada warns of headwinds after better-than-expected profit – Financial Post

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“We expect mortgage growth to slow going forward as pent-up housing demand begins to cool,” Royal Bank Chief Executive Dave McKay said on the call.

Royal Bank joined rivals including Bank of Nova Scotia , Bank of Montreal and National Bank of Canada in reporting better-than-expected fourth-quarter profits as it set aside less money than analysts had estimated to cover future bad loans.

That came after three straight quarters of adding to provisions for credit losses, including on performing loans, that have built up record reserve levels.

But should the pessimistic scenario materialize, allowances on performing loans would have to increase by about 18 per cent, Royal Bank Chief Risk Officer Graeme Hepworth said.

Amid short-term headwinds like the second coronavirus pandemic wave, and the end of loan deferrals and government support, “we do see a world where delinquencies and … impairments will start to increase through 2021,” Hepworth said.

That would come as trading and underwriting activity, which helped the bank’s capital markets unit generate near-record earnings of $2.8 billion this year, moderates, executives said.

Royal Bank reported fourth-quarter adjusted net income of $2.27 per share, up 5 cents from a year earlier, and better than estimates of $2.05.

National Bank, the smallest of Canada’s six largest lenders, which also reported results on Wednesday, took provisions of $110 million, versus the nearly $160 million that was expected. That helped it post adjusted profit of $1.69 a share, compared with expectations of $1.52.

Royal Bank shares slipped 0.3 per cent to $107.72 in morning trading on the Toronto Stock Exchange, while National Bank’s stock dropped 1.1 per cent to $72.67. The TSE’s stock benchmark fell 0.1 per cent.

© Thomson Reuters 2020

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