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Canada’s ‘K-shaped’ recovery spans jobs, debt and housing – Global News

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“Two solitudes” might be a good way to describe Canada’s economy during the novel coronavirus pandemic.

While feelings of loneliness and isolation are common amid shutdowns and social distancing, there’s a growing divide between those who have emerged from the economic slump in fine — or even better — shape and those who have landed in a financial dark pit.

When it comes to jobs, debt and housing, Canada’s economic trajectory has split into two, data shows. It’s what economists refer to as a “K-shaped” recovery.






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Latest job numbers indicate Canada’s economy on the rebound


Latest job numbers indicate Canada’s economy on the rebound

On the upper-arm of the K are higher earners, homeowners and older Canadians, as well as companies that can do business remotely or have capitalized on new pandemic-linked trends.

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On the lower-arm of the K are hourly workers, who are more likely to hold jobs that require face-to-face interaction and be employed in the industries that have been hardest-hit by the lockdown, such as hospitality, retail and entertainment.

Young people, whose jobs are often first to be axed in a downturn, are also overrepresented in the bottom half of the K.

The latest example of the growing bifurcation was Canada’s September jobs report.

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On one hand, job growth was much stronger than expected. The labour market added more than 378,000 positions, far more than the lukewarm forecast of around 150,000 many economists had anticipated. Most of the new jobs were in full-time work, with the data showing significant employment gains for women.

For both mother and fathers, September employment was “on par with pre-pandemic levels,” Statistics Canada noted.

But the report painted a starkly different picture in some corners of the labour market. The number of low-wage employees was down by more than 760,000 compared to September 2019. And employment for Canadian youth was still 10 per cent below February levels, the agency noted.


Click to play video 'Real estate is one of the few sectors showing strong growth in Canadian economy'



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Real estate is one of the few sectors showing strong growth in Canadian economy


Real estate is one of the few sectors showing strong growth in Canadian economy

Jobs

“This overwhelmingly hit hourly-paid workers,” says Mikal Skuterud, a labour economist at the University of Waterloo.

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While high-wage earners had recovered all their work hours by the summer, work for those making less than $20 an hour is still 20 per cent below what it was pre-pandemic, according to Skuterud.

Recessions typically come with a reduction in consumer demand, Skuterud says. And as people buy less, the impact is usually heaviest on goods-producing industries and the construction.

Read more:
Canada adds 378K jobs in September, beating expectations

But the economic shock triggered by the pandemic has mostly hurt one part of the supply side of the economy: the service sector.

Normally, a recession will kill off good-paying jobs for men,” says Armine Yalnizyan, an economist and fellow at the Atkinson Foundation.

This time it has been low-paid service-sector workers — often women and racial minorities — who bore the brunt of the crisis, she adds.

Young people have also had an especially rough ride, Skuterud says.

Those under 35 make up the bulk of the 1.3 million Canadians who had been jobless for more than six months as of September, he says.

The surge in the number of people who’ve been out of work for that long is in itself concerns, according to Skuterud. Following the 2008 financial crisis, by comparison, it peaked around 900,000.

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But the trend is especially worrisome for Canada’s youth, he adds.

“When somebody is jobless for six months or more, it becomes increasingly difficult to get back to a job,” he says.

“I think there’s reason to be worried about this group of young people and [the] long term effects on [their] careers,” he says.


Click to play video 'Is Ontario losing its grip on COVID-19 recovery?'



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Is Ontario losing its grip on COVID-19 recovery?


Is Ontario losing its grip on COVID-19 recovery?

Debt

The divide in the labour market fortunes of Canadians is also producing two radically different trends when it comes to household debt.

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On the one hand, those who have lost their jobs or seen their incomes decline are struggling.

On the other hand, those who are holed up at home working from laptops have preserved their paycheque and, often, seen their monthly expenses drop. With fewer opportunities to spend, these households have been paying off debt aggressively and beefing up their savings.

While two in five Canadians say they are worse off financially because of the pandemic, one in five say their money situation has improved, according to a recent survey conducted by the Angus Reid Group for BDO Canada, an assurance, accounting, tax, and advisory firm.

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Those who say they’re saving more are likely to be university-educated and earn more than $100,000 a year, according to the report.

Meanwhile, two in five say they are seeing their debt pile up because of the pandemic, the survey shows.

Michael Braga, vice-president at BDO, says he’s never seen anything like the current split in his 19 years in the financial sector.

And that spread will likely widen as the pandemic drags on, he says.

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So far, Ottawa’s emergency benefit programs and debt deferrals options offered by many lenders have helped keep struggling borrowers afloat, he says. Tellingly, the number of individuals filing for insolvency has been far lower over the past few months than it was last year.

But as banks start to demand payments, collections resume and the Canada Revenue Agency once again starts to go after outstanding tax liabilities, the trend will likely reverse, according to Braga.

“We’re waiting for the floodgates to open,” he says.


Click to play video 'Dealing with debt during the pandemic'



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Dealing with debt during the pandemic


Dealing with debt during the pandemic

Housing

Buoying the fortunes of older and higher-earning Canadians is also the housing market.

Home sales volumes hit a monthly record for the third month in a row in September, according to the Canadian Real Estate Association. Sales were up 0.9 per cent from August in seasonally adjusted terms, which brought them to a gargantuan 45.6 per cent above levels seen the previous September, which gains spread across the country.

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Pent-up demand from homebuyers who spent the spring in lockdown, pandemic-induced cravings for more space and less contact with strangers outside their social bubble, as well as low interest rates, explain the demand for housing and especially detached homes, economists say.

The MLS Home Price Index, which adjusts for the mix of home types sold, has risen by 10.3 per cent.

Read more:
Thinking of selling your home? This could save you thousands

Rents, on the other, have been declining in many markets. The average rent for properties listed on Canadian rental site Rentals.ca, for example, was down 9.5 per cent in September year-over-year nationwide.

But while this has given some people a chance to upgrade their digs, it hasn’t translated into broad gains for renters, who tend to be lower-income in Canada, according to Yalnizyan.

Renters who stay put aren’t seeing their rent go down, she says. And those who’ve been struggling financially may not be able to catch up on missed rent payments, she adds.

“We don’t know whether we’re gonna be seeing a wave of evictions,” she says.


Click to play video 'Money Smarts: Mortgage deferral period ending'



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Money Smarts: Mortgage deferral period ending


Money Smarts: Mortgage deferral period ending

What’s in store?

It’s hard to say how long the economy will hold its K-shaped pattern.

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On one hand, rising COVID-19 case counts rise and new restrictions spell trouble for restaurants, bard, gyms, movie theatres and other service-sector businesses.

“The September report for the labour force surveys (is) probably as good as it’s going to get in the coming months,” Yalnizyan says.

On the other hand, public health authorities now have a much better understanding of the risks of the virus and how to handle it, Skuterud says. This could result in a better ability to keep schools and workplaces open, he says.

Still, if the economic recovery stalls, “there’s a possibility that more people will leave the upper arm of the K and just fall down the lower arm as the fall progresses,” she says.

And the majority of those would probably be women, who are both more likely to work in pandemic-sensitive jobs and more likely to have to stop or scale back working if schools and daycare shut down again, Yalnizyan says.

“We’ve got a real issue to watch as we move forward about women not only not being employed but not even looking for work, just pulling out of the labour market entirely,” she says.

© 2020 Global News, a division of Corus Entertainment Inc.

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STD epidemic slows as new syphilis and gonorrhea cases fall in US

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NEW YORK (AP) — The U.S. syphilis epidemic slowed dramatically last year, gonorrhea cases fell and chlamydia cases remained below prepandemic levels, according to federal data released Tuesday.

The numbers represented some good news about sexually transmitted diseases, which experienced some alarming increases in past years due to declining condom use, inadequate sex education, and reduced testing and treatment when the COVID-19 pandemic hit.

Last year, cases of the most infectious stages of syphilis fell 10% from the year before — the first substantial decline in more than two decades. Gonorrhea cases dropped 7%, marking a second straight year of decline and bringing the number below what it was in 2019.

“I’m encouraged, and it’s been a long time since I felt that way” about the nation’s epidemic of sexually transmitted infections, said the CDC’s Dr. Jonathan Mermin. “Something is working.”

More than 2.4 million cases of syphilis, gonorrhea and chlamydia were diagnosed and reported last year — 1.6 million cases of chlamydia, 600,000 of gonorrhea, and more than 209,000 of syphilis.

Syphilis is a particular concern. For centuries, it was a common but feared infection that could deform the body and end in death. New cases plummeted in the U.S. starting in the 1940s when infection-fighting antibiotics became widely available, and they trended down for a half century after that. By 2002, however, cases began rising again, with men who have sex with other men being disproportionately affected.

The new report found cases of syphilis in their early, most infectious stages dropped 13% among gay and bisexual men. It was the first such drop since the agency began reporting data for that group in the mid-2000s.

However, there was a 12% increase in the rate of cases of unknown- or later-stage syphilis — a reflection of people infected years ago.

Cases of syphilis in newborns, passed on from infected mothers, also rose. There were nearly 4,000 cases, including 279 stillbirths and infant deaths.

“This means pregnant women are not being tested often enough,” said Dr. Jeffrey Klausner, a professor of medicine at the University of Southern California.

What caused some of the STD trends to improve? Several experts say one contributor is the growing use of an antibiotic as a “morning-after pill.” Studies have shown that taking doxycycline within 72 hours of unprotected sex cuts the risk of developing syphilis, gonorrhea and chlamydia.

In June, the CDC started recommending doxycycline as a morning-after pill, specifically for gay and bisexual men and transgender women who recently had an STD diagnosis. But health departments and organizations in some cities had been giving the pills to people for a couple years.

Some experts believe that the 2022 mpox outbreak — which mainly hit gay and bisexual men — may have had a lingering effect on sexual behavior in 2023, or at least on people’s willingness to get tested when strange sores appeared.

Another factor may have been an increase in the number of health workers testing people for infections, doing contact tracing and connecting people to treatment. Congress gave $1.2 billion to expand the workforce over five years, including $600 million to states, cities and territories that get STD prevention funding from CDC.

Last year had the “most activity with that funding throughout the U.S.,” said David Harvey, executive director of the National Coalition of STD Directors.

However, Congress ended the funds early as a part of last year’s debt ceiling deal, cutting off $400 million. Some people already have lost their jobs, said a spokeswoman for Harvey’s organization.

Still, Harvey said he had reasons for optimism, including the growing use of doxycycline and a push for at-home STD test kits.

Also, there are reasons to think the next presidential administration could get behind STD prevention. In 2019, then-President Donald Trump announced a campaign to “eliminate” the U.S. HIV epidemic by 2030. (Federal health officials later clarified that the actual goal was a huge reduction in new infections — fewer than 3,000 a year.)

There were nearly 32,000 new HIV infections in 2022, the CDC estimates. But a boost in public health funding for HIV could also also help bring down other sexually transmitted infections, experts said.

“When the government puts in resources, puts in money, we see declines in STDs,” Klausner said.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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World’s largest active volcano Mauna Loa showed telltale warning signs before erupting in 2022

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WASHINGTON (AP) — Scientists can’t know precisely when a volcano is about to erupt, but they can sometimes pick up telltale signs.

That happened two years ago with the world’s largest active volcano. About two months before Mauna Loa spewed rivers of glowing orange molten lava, geologists detected small earthquakes nearby and other signs, and they warned residents on Hawaii‘s Big Island.

Now a study of the volcano’s lava confirms their timeline for when the molten rock below was on the move.

“Volcanoes are tricky because we don’t get to watch directly what’s happening inside – we have to look for other signs,” said Erik Klemetti Gonzalez, a volcano expert at Denison University, who was not involved in the study.

Upswelling ground and increased earthquake activity near the volcano resulted from magma rising from lower levels of Earth’s crust to fill chambers beneath the volcano, said Kendra Lynn, a research geologist at the Hawaiian Volcano Observatory and co-author of a new study in Nature Communications.

When pressure was high enough, the magma broke through brittle surface rock and became lava – and the eruption began in late November 2022. Later, researchers collected samples of volcanic rock for analysis.

The chemical makeup of certain crystals within the lava indicated that around 70 days before the eruption, large quantities of molten rock had moved from around 1.9 miles (3 kilometers) to 3 miles (5 kilometers) under the summit to a mile (2 kilometers) or less beneath, the study found. This matched the timeline the geologists had observed with other signs.

The last time Mauna Loa erupted was in 1984. Most of the U.S. volcanoes that scientists consider to be active are found in Hawaii, Alaska and the West Coast.

Worldwide, around 585 volcanoes are considered active.

Scientists can’t predict eruptions, but they can make a “forecast,” said Ben Andrews, who heads the global volcano program at the Smithsonian Institution and who was not involved in the study.

Andrews compared volcano forecasts to weather forecasts – informed “probabilities” that an event will occur. And better data about the past behavior of specific volcanos can help researchers finetune forecasts of future activity, experts say.

(asterisk)We can look for similar patterns in the future and expect that there’s a higher probability of conditions for an eruption happening,” said Klemetti Gonzalez.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

The Canadian Press. All rights reserved.

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Waymo’s robotaxis now open to anyone who wants a driverless ride in Los Angeles

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Waymo on Tuesday opened its robotaxi service to anyone who wants a ride around Los Angeles, marking another milestone in the evolution of self-driving car technology since the company began as a secret project at Google 15 years ago.

The expansion comes eight months after Waymo began offering rides in Los Angeles to a limited group of passengers chosen from a waiting list that had ballooned to more than 300,000 people. Now, anyone with the Waymo One smartphone app will be able to request a ride around an 80-square-mile (129-square-kilometer) territory spanning the second largest U.S. city.

After Waymo received approval from California regulators to charge for rides 15 months ago, the company initially chose to launch its operations in San Francisco before offering a limited service in Los Angeles.

Before deciding to compete against conventional ride-hailing pioneers Uber and Lyft in California, Waymo unleashed its robotaxis in Phoenix in 2020 and has been steadily extending the reach of its service in that Arizona city ever since.

Driverless rides are proving to be more than just a novelty. Waymo says it now transports more than 50,000 weekly passengers in its robotaxis, a volume of business numbers that helped the company recently raise $5.6 billion from its corporate parent Alphabet and a list of other investors that included venture capital firm Andreesen Horowitz and financial management firm T. Rowe Price.

“Our service has matured quickly and our riders are embracing the many benefits of fully autonomous driving,” Waymo co-CEO Tekedra Mawakana said in a blog post.

Despite its inroads, Waymo is still believed to be losing money. Although Alphabet doesn’t disclose Waymo’s financial results, the robotaxi is a major part of an “Other Bets” division that had suffered an operating loss of $3.3 billion through the first nine months of this year, down from a setback of $4.2 billion at the same time last year.

But Waymo has come a long way since Google began working on self-driving cars in 2009 as part of project “Chauffeur.” Since its 2016 spinoff from Google, Waymo has established itself as the clear leader in a robotaxi industry that’s getting more congested.

Electric auto pioneer Tesla is aiming to launch a rival “Cybercab” service by 2026, although its CEO Elon Musk said he hopes the company can get the required regulatory clearances to operate in Texas and California by next year.

Tesla’s projected timeline for competing against Waymo has been met with skepticism because Musk has made unfulfilled promises about the company’s self-driving car technology for nearly a decade.

Meanwhile, Waymo’s robotaxis have driven more than 20 million fully autonomous miles and provided more than 2 million rides to passengers without encountering a serious accident that resulted in its operations being sidelined.

That safety record is a stark contrast to one of its early rivals, Cruise, a robotaxi service owned by General Motors. Cruise’s California license was suspended last year after one of its driverless cars in San Francisco dragged a jaywalking pedestrian who had been struck by a different car driven by a human.

Cruise is now trying to rebound by joining forces with Uber to make some of its services available next year in U.S. cities that still haven’t been announced. But Waymo also has forged a similar alliance with Uber to dispatch its robotaxi in Atlanta and Austin, Texas next year.

Another robotaxi service, Amazon’s Zoox, is hoping to begin offering driverless rides to the general public in Las Vegas at some point next year before also launching in San Francisco.

The Canadian Press. All rights reserved.

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