The US labor market strengthened in November with pickups in employment and wages, deflating hopes the Federal Reserve will cut interest rates early next year.
(Bloomberg) — The US labor market strengthened in November with pickups in employment and wages, deflating hopes the Federal Reserve will cut interest rates early next year.
The acceleration in payrolls is at odds with recent reports that have depicted a softer hiring pace, an outcome favored by the Fed as it will help rein in demand and tame price pressures. Officials are still expected to leave rates unchanged when they meet next week.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
US
Payrolls increased 199,000 last month following a 150,000 advance in October. The return of striking auto workers helped boost the count by 30,000. The solid labor-market figures shift focus to inflation numbers this coming week as Fed officials gauge how long to maintain interest rates at this cycle’s peak.
Consumer sentiment rebounded sharply in early December, topping all forecasts as households dialed back their year-ahead inflation expectations by the most in 22 years. Consumers see prices rising at an annual rate of 3.1% over the coming year, the lowest level since March 2021. The 1.4 percentage points decline from the prior month was the largest since October 2001.
World
Price increases in OECD countries slowed in October to the weakest in two years in a sign that advanced economies are overcoming their worst inflation crisis in decades. The headline measure for the 38-member club, which includes all Group of Seven economies, dropped to 5.6% from 6.2% as food-cost pressures lessened rapidly and energy prices fell back in most countries.
Israel’s central bank brought its unprecedented currency interventions to an almost complete halt in November, as the shekel rebounded in tandem with the rally in US stocks while the war against Hamas stays relatively contained. Kenya surprised with the biggest interest-rate hike in more than a decade. Canada, Australia, Poland, Namibia, Uganda, Serbia and India left rates unchanged.
Europe
Industrial production in Germany and Italy stumbled at the start of the final quarter of the year, after France and Spain reported similar outcomes, pointing to a possible recession in the region.
Asia
Japan’s economy shrank at the sharpest pace since the height of the pandemic, an outcome that complicates the policy path for the Bank of Japan amid soaring speculation it is edging closer to scrapping the world’s last negative rate regime. Gross domestic product contracted at a 2.9% annualized pace in the three months through September from the previous quarter.
Assets held by South Korean households shrank for the first time in data going back a decade after the central bank rapidly raised interest rates, contributing to a correction in the property market.
Hong Kong’s economy will likely grow more slowly than previously expected both this year and next as challenges from China’s slowdown and the impact from elevated interest rates weigh on the financial hub. The downgrades reflect a muted post-pandemic recovery as growth has been weak despite a boost this year from a tourism revival, and suggest that tough times are still ahead for the Asian financial center.
Emerging Markets
Brazil’s economy unexpectedly expanded in the third quarter, giving a temporary boost to President Luiz Inacio Lula da Silva and his efforts to improve living standards ahead of a period of softer growth.
—With assistance from Lisa Du, William Horobin, Sam Kim, Cynthia Li, Ruth Liao, Yoshiaki Nohara, Andrew Rosati, Zoe Schneeweiss, Alexander Weber and Sonja Wind.
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.
The Canadian Press. All rights reserved.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
The Canadian Press. All rights reserved.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
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