COLUMN: Shopping locally stimulates the economy &#8211; Nelson Star

By Tom Thomson

For many of us, holiday shopping lists still linger as we hit the streets hoping to stretch our spending as far as possible. Keep your shopping close to home and buy locally where a purchase at a local store or restaurant has the greatest community impact.

The reasons for shopping locally can easily be forgotten in a cyber shopping world but the fact is, keeping money circulating in our greater community is an important consumer decision for us, and one that needs to be top of mind, something the Chamber of Commerce has been working on over the years

All these folks — shopkeepers, restaurateurs, retailers, service providers, professionals and more — live and work in our region and they’re already spending their dollars in our community or region. They pay for salaries, supplies, rent, taxes, utilities and so on. They also stay in the community and buy their groceries, clothe their kids and rely on local services such as hairdressers and accountants. The effects are far-reaching and important.

The fourth quarter of the year is significant for businesses but for retail it is critical. This is when they make a substantial part of their annual revenue, counting on a surplus in the last final months to keep the doors open in the cold months of January and February. Now is the time to show your support for the work they do.

We live in the age of online shopping. Most everything we might need is available with a few keystrokes. The lure of Amazon, with a multitude of merchandise options and free delivery beckons. No traffic, no parking hassles, no crowds. Why, then, would we choose to shop locally?

There is no real methodology keeping track of how much money flows out of the area from shopping excursions, or online purchases, but you can safely say it is in the millions of dollars. Those dollars would be put to much better use keeping our own regional economy vibrant, creating or at the very least retaining jobs!

Local shops, restaurants, and services create jobs that keep the economy stable, and the property taxes, sales taxes and payroll taxes help support services we have come to expect and what many deem essential to our community. When was the last time Amazon sponsored your local soccer team, or supported Mural Fest or a performance at the Capitol Theatre?

Shopping locally is the most basic form of trickle-down economics — and we all stand to gain. Successful businesses give thousands of dollars a year to much-needed local charities. A thriving business sector contributes to the coffers of the municipality through taxes, helping to fund all manner of public works, from parks to sidewalks, that enhance the quality of life for everyone.

As homeowners, we have watched our monthly bills increase dramatically through the years. For businesses, take those expenses, double them, or even more, add in payroll costs and other business expenses and you see the pressures.

Costs of leases have been squeezed upwards as landlords pass along increases in municipal, regional, and provincial business levies. Water, sewer, and hydro costs continue a steep upward curve for homeowners, but for businesses, the local commercial tax multiplier is over two times what residential tax increases have been, and utility rates for water, sewer, hydro etc. are also at a fixed rate higher than personal residences.

In some ways, I get it. By shopping online, you are just trying to get the best deal, find a greater selection and keep the costs lower for you and your family, but at what cost to our community?

When you shop in our region, you’ll find our local businesses offer a great selection with competitive pricing and quality that’s second-to-none, local experts with product knowledge you won’t find online, plus home-grown customer service and easy return policies.

In addition to the vital economy we all want, there are other benefits to shopping locally. For example, it is true that most business owners employ an array of supporting services by buying locally themselves. They hire architects, designers, cabinet shops, sign makers and building contractors/developers for construction and local accountants, insurance brokers, computer consultants, and attorneys to help run it.

Local owners, typically having invested much of their life savings in their businesses, have a natural interest in the community’s long-term health.

As a community we should continue to Think Local First so shopping locally is our first choice. We have wonderful retail, accommodation, dining, and service providers in the Nelson area. If you find what you want locally, if the price is competitive and the quality meets your needs, your decision should be easy: Buy it here!

Tom Thomson is the executive director of the Nelson and District Chamber of Commerce

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Economy

A slow September for the U.S. economy: Morning Brief – Yahoo Canada Finance

Published

38 mins ago

September 18, 2020

Friday, September 18, 2020

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Things could be worse, but this doesn’t make them good.

The U.S. economic recovery slowed in September, according to economists.

But given the absence of new stimulus and the continued spread of COVID-19, this growth-at-a-slower-pace outcome suggests the recovery may continue even in the absence of a new stimulus package.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="And the fact that the economy isn’t in an outright contraction is a nice upside surprise given that fresh stimulus had been seen as essential for any recovery to continue just a few months back.” data-reactid=”22″>And the fact that the economy isn’t in an outright contraction is a nice upside surprise given that fresh stimulus had been seen as essential for any recovery to continue just a few months back.

“The pace of economic recovery has slowed in the last month, but that is arguably still an impressive result given the surge in coronavirus cases over the summer, and the more recent expiry of the enhanced unemployment benefits,” said Paul Ashworth, an economist at Capital Economics in a note on Thursday.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Retail sales, for instance, are back above pre-pandemic levels. But consumption in the services sector — such as at restaurants, where much of current unemployment is focused — has slowed at levels well below those that prevailed last year.” data-reactid=”24″>Retail sales, for instance, are back above pre-pandemic levels. But consumption in the services sector — such as at restaurants, where much of current unemployment is focused — has slowed at levels well below those that prevailed last year.

September’s data also showed a temporary pop from the Labor Day holiday, with economists at Bank of America Global Research noting that seated diners, according to OpenTable and TSA passenger data, both took a step back last week after a pop around the holiday.

Like Capital Economics, however, Bank of America also sees a recovery that continues to be quite resilient. “Bottom line: Labor Day has distorted the signal from many of the high frequency indicators that we track,” the firm said in a report published Wednesday.

“However, the New York Fed weekly economic index and Dallas mobility and engagement index continue to signal that the recovery has continued in September, but there is still a long road ahead before the economy is fully healed.”

Over at Oxford Economics, Gregory Daco notes that the firm’s proprietary recovery tracker index fell for week ended September 4 — the most recent week for which the firm has complete data — though most of this decline was due to the selloff in markets that tightened financial conditions.

Daco is also tracking concerning signs in the labor market, however, where gains slowed in early September at both the national and regional level.

“Employment continued to climb on stronger job openings and increased employment at small businesses, but momentum slowed,” Daco writes. Adding that, “regional labor market recoveries have lost strength, posing a risk to consumer spending absent additional fiscal aid.”

The labor market recovery lost momentum in early September while overall activity has been resilient even amid the absence of additional fiscal stimulus. (Source: Oxford Economics)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But given the mid-summer conversation about a “benefits cliff” the economy has now walked off with the CARES Act expiring at the end of July, a slowing but not contracting economy is a positive and surprising development.” data-reactid=”42″>But given the mid-summer conversation about a “benefits cliff” the economy has now walked off with the CARES Act expiring at the end of July, a slowing but not contracting economy is a positive and surprising development.

Which suggests a more durable recovery is possible if either a vaccine is available earlier than expected or fiscal stimulus is made available to consumers in the months ahead.

But these positive developments are far from an all-clear that the pandemic-induced downturn is behind us and that further diligence isn’t warranted.

“Activity in the housing sector has returned to its level at the beginning of the year, and we are starting to see signs of an improvement in business investment,” Federal Reserve Chair Jerome Powell said Wednesday. “The recovery has progressed more quickly than generally expected, and forecasts from FOMC participants for economic growth this year have been revised up since our June Summary of Economic Projections.”

“Even so, overall activity remains well below its level before the pandemic and the path ahead remains highly uncertain,” Powell said.

Adding: “A full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.”

By Myles Udland, reporter and co-anchor of The Final Round. Follow him at @MylesUdland

What to watch today

Economy

8:30 a.m. ET: Current account balance, second quarter (-$160.0 billion expected, -$104.2 billion during the first quarter)
10:00 a.m. ET: Leading index, August (1.3% expected, 1.4% in July)
10:00 a.m. ET: University of Michigan Sentiment, September preliminary (75.0 expected, 74.1 in August)

Top News

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="European stocks dip as infections rise and central banks ‘sit on their hands’ [Yahoo Finance UK]” data-reactid=”60″>European stocks dip as infections rise and central banks ‘sit on their hands’ [Yahoo Finance UK]

TikTok’s owner is getting surer Beijing will OK U.S. deal [Bloomberg]

Bank of England stokes negative interest rate speculation [Yahoo Finance UK]

In Wisconsin, Trump announces $13 billion in farm aid [Reuters]

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="YAHOO FINANCE HIGHLIGHTS” data-reactid=”64″>YAHOO FINANCE HIGHLIGHTS

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Whole Foods CEO does not think online grocery will remain the norm post-pandemic: ‘Food is different’” data-reactid=”65″>Whole Foods CEO does not think online grocery will remain the norm post-pandemic: ‘Food is different’

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Warren and Schumer urge student debt cancellation of up to $50,000 for all federal borrowers

—

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Economy

Resurging coronavirus biggest threat to euro zone economy: economists – The Journal Pioneer

Published

5 hours ago

September 18, 2020

By Shrutee Sarkar

BENGALURU (Reuters) – The resurgence in coronavirus cases is the biggest threat to the recovering euro zone economy, according to a Reuters poll of economists, who say growth and inflation are more likely to create negative surprises over the coming year than positive ones.

Around 30 million people have been infected by the virus globally, and more than 900,000 have died, triggering some of the deepest recessions on record and breaking up supply chains around the world. COVID-19 global tracker https://www.reutersagency.com/en/coverage/covid-19-global-tracker

While a strong euro zone rebound is underway as lockdown restrictions have been eased and businesses reopened, France and Spain among others in the 19-member bloc are grappling with a virus resurgence.

That is raising the possibility of renewed restrictions and lockdowns.

“A flaring in the number of COVID-19 infections over the summer months has made it very clear that if there is no effective vaccine, growth will be handicapped,” said Peter Vanden Houte, chief economist at ING.

“There is also the fear of negative second-round effects once the current recession starts to be reflected in a swelling number of unemployed…(and) we cannot exclude higher precautionary savings dampening consumption.”

A return to where the economy was before the outbreak earlier this year is not expected until at least end-2022.

That comes despite the European Central Bank’s planned 1.35 trillion euros of pandemic-related additional asset purchases and an historic 750 billion euro recovery fund from the European Union due to kick in next year.

But the concern is that no new stimulus is on the horizon, other than national governments extending worker furloughs put in place early this year as they struggle with soaring debt.

Euro zone unemployment, which finally declined just before the coronavirus struck to where it was before the last financial crisis more than a decade ago, is already rising.

Ninety percent of economists, or 37 of 41 who responded to an additional question in the Sept. 15-17 Reuters poll, said a further surge in infections was the biggest risk to the euro zone economy over the coming year.

The remaining handful of respondents cited a strong euro, and no trade deal reached between the EU and United Kingdom when the Brexit transition period expires at the end of the year.

For a graphic on Reuters Poll: Euro zone economic outlook:

https://fingfx.thomsonreuters.com/gfx/polling/jznpnlbqopl/Reuters%20Poll-%20EZ%20economic%20outlook%20-%20September%202020.PNG

The Reuters poll of over 80 economists pointed to 8.1% quarterly growth this quarter, by far the strongest on record, following an historic 11.8% contraction in Q2. That forecast was unchanged from the August poll.

Quarter-on-quarter growth is then set to slow sharply to a still-strong 2.5% in Q4, but down from 3.0% predicted last month.

In a worst-case scenario, the economy was forecast to grow 4.5% in Q3, compared to 4.0% in the last poll. The worst-case for Q4 is now just a 0.4% contraction versus a 2.0% fall in the August poll.

But over 80% of respondents said the risks to both their euro zone growth and inflation forecasts were skewed more to the downside over the coming year.

“The virus is making new waves and the economy is still far from operating at pre-COVID levels in most sectors,” said Elwin de Groot, head of macro strategy at Rabobank, who expects no growth in the final three months of this year.

“But as governments are likely to shift towards more targeted measures – rather than blanket ones – the ‘true’ economic damage may only reveal itself in the next quarters.”

Most economists have remained pessimistic about the bloc’s growth outlook since the pandemic struck, and some have lowered their inflation views even further from last month.

The consensus for this quarter was 0.1% versus 0.3% predicted a month ago, followed by stagnation the next quarter. On a full-year basis, results were broadly in line with the ECB’s staff projections, at 0.4% for 2020, 1.0% for 2021 and 1.3% for 2022.

For a graphic on Reuters Poll: Euro zone economic growth and inflation outlook:

https://fingfx.thomsonreuters.com/gfx/polling/yzdvxqdjgpx/Reuters%20Poll-%20ECB%20and%20EZ%20outlook.PNG

(For other stories from the Reuters global long-term economic outlook polls package:)

(Reporting by Shrutee Sarkar and Richa Rebello; Polling by Hari Kishan and Nagamani Lingappa; Editing by Ross Finley and Alexandra Hudson)

Economy

Indian Economy Heads for Double-Digit Plunge as Virus Spikes – Yahoo Canada Finance

Published

6 hours ago

September 18, 2020

Indian Economy Heads for Double-Digit Plunge as Virus Spikes

(Bloomberg) — India’s economic recovery prospects have gone from bad to worse after the nation emerged as a new global hotspot for the coronavirus pandemic with more than 5 million infections.

Economists and global institutions like the Asian Development Bank have recently cut India’s growth projections from already historic lows as the virus continues to spread. Goldman Sachs Group Inc. now estimates a 14.8% contraction in gross domestic product for the year through March 2021, while the ADB is forecasting -9%. The Organisation for Economic Co-operation and Development sees the economy shrinking by 10.2%.

The failure to get infections under control will set back business activity and consumption — the bedrock of the economy — which had been slowly picking up after India began easing one of the world’s strictest and biggest lockdowns that started late March. Local virus cases topped the 5 million mark this week, with the death toll surpassed only by the U.S. and Brazil.

“While a second wave of infections is being witnessed globally, India still has not been able to flatten the first wave of infection curve,” said Sunil Kumar Sinha, principal economist at India Ratings and Research Ltd., a unit of Fitch Ratings Ltd. He now sees India’s economy contracting 11.8% in the fiscal year, far worse than his earlier projection of -5.8%.

Goldman Sachs’s latest growth forecast came last week after data showed gross domestic product plunged 23.9% in the April-June quarter from a year ago, the biggest decline since records began in 1996 and the worst performance of major economies tracked by Bloomberg.

While there are some signs that activity picked up following the strict lockdown, a strong recovery looks uncertain.

“By all indications, the recovery is likely to be gradual as efforts toward reopening of the economy are confronted with rising infections,” Reserve Bank of India Governor Shaktikanta Das told a group of industrialists Wednesday.

Lower Potential

The central bank will likely release its own growth forecast on Oct. 1 when the monetary policy committee announces its interest rate decision. In August, the RBI said private spending on discretionary items had taken a knock, especially on transport services, hospitality, recreation and cultural activities.

The plunge in GDP, as well as ongoing stress in the banking sector and among households, will curb India’s medium-term growth potential. Tanvee Gupta Jain, an economist at UBS Group AG in Mumbai, estimates potential growth will slow to 6% from 7.1% year-on-year estimated in 2017.

What Bloomberg’s Economists Say

India went into the Covid-19 pandemic already suffering a downward trend in growth potential. We expect a 10.6% contraction in fiscal 2021, rebound in 2022, and slower path for growth as scars from the virus recession drag on the remaining years of the decade.

Click here to read the full report.

Abhishek Gupta, India economist

In addition to that, corporate profits have collapsed, putting a brake on investments, which in turn, will curb employment and growth in the economy.

India is “likely to see a shallow and delayed recovery in corporate sector profitability over the next several quarters,” said Kaushik Das, chief economist at Deutsche Bank AG in Mumbai, who has downgraded his fiscal year growth forecast to -8% from -6.2%. That will “reduce the incentive and ability for fresh investments, which in turn will be a drag on credit growth and overall real GDP growth,” he said.

Still, foreign investor sentiment will likely return once the pandemic eases, said Todd Buchholz, a former White House economist and now author.

“The virus is seen as a temporary phenomenon,” he said in an interview. “Those investors who were lining up to invest in India in January 2020 will do so in 2021 also, and deregulation has to continue.”

(Updates with comment from economist in last paragraph.)

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