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Canada's economy gains 34500 jobs, more than double the forecast – Financial Post

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OTTAWA — Canada added more than twice the number of jobs than expected in January, the latest indication that the economy could be strong enough to persuade the Bank of Canada not to cut rates next month.

Statistics Canada said on Friday that 34,500 jobs had been created in January, the second straight month of healthy gains after a record loss in November. The unemployment rate dipped to a near record low 5.5 per cent.

Analysts polled by Reuters had forecast a gain of 15,000 positions and for the jobless rate to stay at 5.6 per cent.

The Bank of Canada has held its key interest rate steady since October 2018 but said last month a cut was possible if a recent slowdown in domestic growth persisted. The bank’s next scheduled rate announcement is March 4.

Derek Holt, vice president of capital markets economics at Scotiabank, said the data was better than expected.

“I think it’s strong enough to give the Bank of Canada a little bit more encouragement and maybe hold off (on cutting rates) in March,” he said in a phone interview.

Market expectations of an interest rate cut in March, as reflected in the overnight index swaps markets, dipped to 10.89 per cent from 12.89 per cent before the data was released.

All the gains were in full-time jobs, said Statscan. The goods-producing sector added 49,100 positions – almost half of them in manufacturing – while the service sector shed 14,500.

The hourly wages for permanent employees – a number closely watched by the Bank of Canada – rose by 4.4 per cent compared with January 2019 and were up from 3.8 per cent in December.

“(It’s a) pretty solid number seeming to indicate that the Canadian economy isn’t losing too much steam, so a positive start to the year in that regard,” said Josh Nye, a senior economist with RBC Economics.

“We think that slow growth leaves the door open to the Bank of Canada lowering interest rates. This jobs number this morning perhaps gives them a bit less urgency to do that.”

Recent data showed the economy surprisingly grew in November, the trade deficit narrowed in December and manufacturing activity expanded in January for the fifth straight month.

The Canadian dollar briefly rose to 1.3284 against the greenback, or 75.28 U.S. cents, from 1.3314, or 75.11 U.S. cents, before falling back.

© Thomson Reuters 2020

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Statistics Are Mixed But On Balance Say The Economy Is Weak – Forbes

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If you listen to the White House, you hear that the economy is strong. Others will tell you that it has already sunk into recession. Such “analytical” differences are common at almost all times and almost always reflect the speaker’s political agenda more than any straightforward reading of the statistical evidence. These days things look more ambiguous than usual. Statistics offer ammunition for both views. The president can point, and he does, to the robust growth in payrolls. Those with a less sanguine view of things can point to among other things two consecutive quarterly declines in the nation’s real gross domestic product (GDP). Although the balance of the evidence points clearly toward a weakening economy, it is also fair to admit that the statistics paint a strangely mixed picture.

The Labor Department’s monthly employment report illustrates. On the positive side, the July survey of employers showed a striking expansion in payrolls, a gain of 528,000 positions. Private payrolls expanded by 471,000 positions. Though these are not record increases, they are nonetheless beyond most historical experience and far beyond where consensus expectations were. But in the same report, the survey of households showed July jobs up only 179,000. This tells quite a different story from the employers’ tally. The jobs gain was not only much smaller but was insufficient to overcome the June decline in jobs so that over the two months June and July the nation by this measure shed some 136,000 jobs.

Despite this contrast – still unexplained by the Labor Department – what tips the balance to the negative side is the flow of information from elsewhere and from the rest of the department’s monthly report. True, the unemployment rate dipped slightly from 3.6% of the workforce in June to 3.5% in July, but department also reported that some 538,000 people dropped out of the workforce in July. Since they are neither working nor seeking work, this movement more than accounts for the fall in the unemployment rate. What is more, the average weekly hours worked remained unchanged in July at 34.6, still down from April’s measure.

Outside the Labor Department’s accounting, there are of course the first and second quarter declines in real GDP, precipitous declines in consumer confidence, and reporting by the Institute of Supply Management (ISM) of slowing overall and an outright decline in the new orders part of the measure. This list of negatives is of course far from complete, but it is nonetheless indicative.

Apart from the current statistics that point to economic decline, two other considerations weigh heavily on the economy’s prospects. One is the ongoing inflation. At last measure, for June, the consumer price index (CPI) rose 9.1% from year-ago levels. This kind of price pressure seems likely to last. Even if it abates some — say to 8% or 7% — it will remain sufficient to impair economic growth prospects by eroding business and consumer confidence and discouraging the saving and investment on which economic growth ultimately depends. These effects could bring on recession all on their own. It certainly would not be the first time in history that inflation did so.

A still more potent recessionary threat emerges from the Federal Reserve’s (Fed’s) fight against inflation. The Fed began this effort last March. Before then, it had pursued a pro-inflationary monetary policy. It had kept short-term interest rates near zero and poured new money into financial markets buying bonds directly – mostly treasuries and mortgages – a practice the Fed refers to as “quantitative easing.” But since the March policy shift, the Fed has drained money from financial markets by selling from the hoard of bonds it had previously acquired and by pushing up short-term interest rates some 1.75 percentage points. While these are standard anti-inflation moves, they also restrain economic activity. What is more, the Fed seems determined to take further steps along these lines in coming weeks and months – a pattern that will make recession still more likely.

If this assessment is correct – and it does seem likely – then the statistics on which the optimists rely – including the White House – will turn negative in coming months. The evidence of economic weakness, if not outright recession, will become overwhelming. Whether this resolution of the economic picture takes place in the next month or two remains uncertain, but it is hardly likely that the ambiguities will remain in place very much longer.

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Ontario Supports Significant Aerospace Investment to Boost Regional Economy – Government of Ontario News

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Ontario Supports Significant Aerospace Investment to Boost Regional Economy  Government of Ontario News



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How to Improve your Credit Score in Canada

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Improving your credit score is important for many reasons. First, it could help you get a lower interest rate on your loans or mortgages. Second, it could help you qualify for better rates on car loans, cell phone plans, and other types of loans. Third, having a good credit score could increase your chances of being approved for a job or apartment. Finally, keeping your credit score high can help you avoid becoming financially stressed in the future. Here are some of the ways you can improve your credit score in Canada:

Monitor your payment history

Your payment history is the most important factor for your credit score.

To improve your payment history:

  • always make your payments on time
  • make at least the minimum payment if you can’t pay the full amount that you owe
  • contact the lender right away if you think you’ll have trouble paying a bill
  • don’t skip a payment even if a bill is in dispute

Use credit wisely

Don’t go over your credit limit. If you have a credit card with a $5,000 limit, try not to go over that limit. Borrowing more than the authorized limit on a credit card can lower your credit score.

Try to use less than 35% of your available credit. It’s better to have a higher credit limit and use less of it each month.

For example:

  • a credit card with a $5,000 limit and an average borrowing amount of $1,000 equals a credit usage rate of 20%
  • a credit card with a $1,000 limit and an average borrowing amount of $500 equals a credit usage rate of 50%

If you use a lot of your available credit, lenders see you as a greater risk. This is true even if you pay your balance in full by the due date.

To figure out the best way to use your available credit, calculate your credit usage rate. You can do this by adding up the credit limits for all your credit products.

This includes:

  • credit cards
  • lines of credit
  • loans

For example, if you have a credit card with a $5,000 limit and a line of credit with a $10,000 limit, your available credit is $15,000.

Once you know how much credit you have available, calculate how much you are using. Try to use less than 35% of your available credit.

For example, if your available credit is $15,000, try not to borrow more than $5,250 at a time, which is 35% of $15,000.

Increase the length of your credit history

The longer you have a credit account open and in use, the better it is for your score. Your credit score may be lower if you have credit accounts that are relatively new.

If you transfer an older account to a new account, the new account is considered new credit.

For example, some credit card offers come with a low introductory interest rate for balance transfers. This means you can transfer your current balance to this new product. The new product is considered new credit.

Consider keeping an older account open even if you don’t need it. Use it from time to time to keep it active. Make sure there is no fee if the account is open but you don’t use it. Check your credit agreement to find out if there is a fee.

Limit your number of credit applications or credit checks

It’s normal and expected that you’ll apply for credit from time to time. When lenders and others ask a credit bureau for your credit report, it’s recorded as an inquiry. Inquiries are also known as credit checks.

If there are too many credit checks in your credit report, lenders may think that you’re:

  • urgently seeking credit
  • trying to live beyond your means

How to control the number of credit checks

To control the number of credit checks in your report:

  • limit the number of times you apply for credit
  • get your quotes from different lenders within a two-week period when shopping around for a car or a mortgage. Your inquiries will be combined and treated as a single inquiry for your credit score.
  • apply for credit only when you really need it

“Hard hits” versus “soft hits”

“Hard hits” are credit checks that appear in your credit report and count toward your credit score. Anyone who views your credit report will see these inquiries.

Examples of hard hits include:

  • an application for a credit card
  • some rental applications
  • some employment applications

“Soft hits” are credit checks that appear in your credit report but only you can see them. These credit checks don’t affect your credit score in any way.

Examples of soft hits include:

  • requesting your own credit report
  • businesses asking for your credit report to update their records about an existing account you have with them

Use different types of credit

Your score may be lower if you only have one type of credit product, such as a credit card.

It’s better to have a mix of different types of credit, such as:

  • a credit card
  • a car loan
  • a line of credit

A mix of credit products may improve your credit score. Make sure you can pay back any money you borrow. Otherwise, you could end up hurting your score by taking on too much debt.

 

Credit: Canada

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