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Coronavirus bigger risk to U.S. economy than election dispute: Reuters poll – TheChronicleHerald.ca

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By Shrutee Sarkar

BENGALURU (Reuters) – The coronavirus is a bigger risk to the U.S. economy than a prolonged dispute over the presidential election result, according to a Reuters poll that showed the near-term economic recovery was slowing more than previously thought.

With around 11 million COVID-19 cases, the United States is by far the hardest-hit country and while a potential vaccine provides some optimism the outlook remains uncertain, the Nov. 10-16 poll of over 100 economists found.

The recent progress toward COVID-19 vaccines pushed Wall Street shares to a record closing high last week, despite a surge in new cases and jitters over President Donald Trump’s refusal to concede the U.S. election to Joe Biden.

Over 90% of economists, or 53 of 57, said elevated coronavirus cases were the bigger risk to the economy for the remainder of this year rather than further uncertainty surrounding when the election results will be made official.

Asked if their forecasts were based on recent progress of a COVID-19 vaccine, 57 economists who responded to a separate question were almost evenly split, suggesting the tonic for Wall Street sentiment is not yet seen as a full public health and economic turning point. With no prospect for swift new spending support from Congress, the economy, now adrift, may weaken again.

“Fiscal support has largely dried up for now, leaving disposable income lower in the final months of the year. But the largest risk is that the third wave of the coronavirus is likely to worsen with colder temperatures,” said David Mericle, chief U.S. economist at Goldman Sachs.

“Renewed lockdowns in Europe are a reminder that the U.S. also faces significant downside risks this winter.”

It’s been whiplash for the economy this year, plunging into the deepest contraction in at least seven decades of 31.4% in the second quarter to the fastest-ever expected growth of 33.1% last quarter.

Gross domestic product (GDP) was forecast to grow an annualized 3.7% this quarter and 3.0% in Q1, a downgrade from 4.0% and 3.7%, respectively, predicted last month.

Those were the sixth and third consecutive monthly downgrades, respectively.

The range of forecasts, -5.6% to +7.4% for this and next quarter, highlights exceptional uncertainty despite these surveys’ solid track record for accuracy this year.

“We suspect manufacturing, construction and most retail will remain open, but restrictions on other sectors will still come at a huge economic cost with millions of jobs potentially at risk,” said James Knightley, chief international economist at ING.

“We fear the December-January period will be tough on both a human and an economic level with a probable negative GDP print for the first quarter.”

This year, the world’s largest economy was forecast to shrink 3.6%, according to the poll of 102 economists. In 2021 and 2022 the consensus was for growth of 3.8% and 2.9%, respectively.

In the interim, much will depend on public health through the coming winter months.

U.S. Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde both say the economy was still in for a tough time even if the development of a potential vaccine was reason for some optimism.

Asked what would happen to U.S.-China trade relations over the coming year, 38 of 56 said they would stay the same. Fifteen said they would improve and three said they would worsen.

“One of the biggest unknowns about the Biden administration is how it will approach China. It is possible tensions will ease, as the president-elect seeks to boost the economic recovery,” said Kevin Loane, senior economist at Fathom Consulting.

“However, it appears equally likely the Biden administration will be more effective in rallying U.S. partners to impose restrictions on their economic links with China, perhaps worsening U.S.-China trade relations as a result.”

(Reporting by Shrutee Sarkar; Additional reporting by Manjul Paul; Polling by Nagamani Lingappa; Editing by Ross Finley and Nick Zieminski)

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‘No plan’ for economy will work without more access to COVID-19 tests, vaccines: O’Toole – Global News

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Canada will not see economic stability until there is wide access to rapid tests and vaccines for the novel coronavirus, Conservative Party Leader Erin O’Toole says.

O’Toole made the remarks during a press conference Sunday morning.

“There is no plan for the economy if we don’t have rapid testing and vaccines as swiftly as possible,” he told reporters.

Read more:
Canada ‘in the top 5’ on list to receive coronavirus vaccines 1st: minister

O’Toole’s comments come as the federal Liberal government prepares to release a fall economic update on Monday.

The government has not tabled a budget for this fiscal year, but in July delivered what it called a “fiscal snapshot” that estimated the deficit was heading for a record of $343.2 billion.

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O’Toole said there can’t be a “full economy, a growing economy, people working, people being productive without the tools to keep that happening in a pandemic.

“Those two tools are rapid tests and a vaccine,” he said.

O’Toole said Canada is “months behind our allies” when it comes to the large-scale rollout and use of rapid COVID-19 tests.

Health Canada has approved more than three dozen different tests for COVID-19, but only six of them are “point-of-care” versions more commonly referred to as rapid tests.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

Millions of rapid tests have been delivered to the provinces, however, health officials have been slow to utilize them as questions about best use and reliability remain unanswered.


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Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine


Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine

O’Toole also said it appears as though Canada will be “months behind our allies on vaccines.”

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“These are critical tools,” he said. “The vaccine is the hope we’re all looking for.”

Canada has signed contracts to secure 400 million doses of COVID-19 vaccine, however, the federal government says only six million of those doses — enough to vaccinate three million people — will be in the country by early January for distribution once approved by Health Canada.

However, both the United States and Britain have said they expect to have millions of vaccine doses by next month and expect to have larger portions of their populations inoculated more quickly.

Read more:
Coronavirus cases are soaring but Trudeau’s approval ratings hold steady: Ipsos

O’Toole said Canadians are going to be “rightly frustrated” when other countries are “rolling out millions of doses” of COVID-19 vaccines before Canada.

“I hate to see us trailing,” O’Toole said. “I don’t compare ourselves to the worst response, I want Canada’s response to be the best, that’s why I want to see a plan and I want to see a plan for the economy — we need to get people working.”


Click to play video 'Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine'



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Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine


Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine

O’Toole is not the only one who appears to be frustrated. In an interview with The West Block’s Mercedes Stephenson, Saskatchewan Premier Scott Moe said it is “troubling” that only a small segment of the Canadian population could be vaccinated immediately.

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Moe said the federal government communicated to the country’s premiers how many doses they would receive, adding that the first round of doses will likely treat about 100,000 people in Saskatchewan.

“We need to receive more and we need to receive it in a much more timely fashion,” he said.

Moe said Canada needs a “more ambitious procurement program for sure.”

Prime Minister Justin Trudeau has said Canada’s lack of domestic manufacturing capabilities for the highly sought-after coronavirus vaccines — several of which use brand new mRNA technology — means it will be slightly further back in the queue than countries that produce the vaccines domestically.

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Still, Intergovernmental Affairs Minister Dominic LeBlanc said on The West Block on Sunday that Canada is still positioned to be in the “top five” in the global queue for vaccines.

— With a file from the Canadian Press

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

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China says official manufacturing PMI for November is 52.1 — beating expectations – CNBC

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Workers producing dolls in a factory in Lianyungang, China’s Jiangsu province.
Stringer | AFP | Getty Images

China said on Monday that manufacturing activity expanded for the ninth straight month in November as the world’s second-largest economy continues to recover from a slump caused by the coronavirus pandemic.

The official manufacturing Purchasing Managers’ Index (PMI) for November came in at 52.1, according to the National Bureau of Statistics. That’s the highest reading in more than three years, as well as better than the 51.5 forecast by analysts in a Reuters poll and October’s official reading of 51.4.

PMI readings above 50 indicate expansion, while those below that signal contraction. PMI readings are sequential and show month-on-month expansion or contraction.

The November data showed that the recovery in China’s vast manufacturing sector has accelerated, according to CNBC’s translation of the statistics bureau’s Mandarin-language statement.

Four factors drove manufacturing activity in November, according to Zhao Qinghe, the bureau’s senior statistician.

  • Both supply and demand of Chinese manufactured goods have continued to improve;
  • Imports and exports have also steadily recovered;
  • Prices of both raw materials and output have risen;
  • Prospects of manufacturers of all sizes have improved.

China also released PMI data for the services sector, which similarly showed that activity expanded for the ninth straight month. The official non-manufacturing PMI reading for November was 56.4, compared with 56.2 in October, data by the statistics bureau showed.

Overall, China said its composite PMI for this month came in at 55.7 — inching up from October’s 55.3.

‘Steady and stable recovery’

Analysts said the latest set of economic indicators point to a pick up in China’s economic growth.

“When we look at the data front in China, it’s been showing steady and stable recovery,” Jackson Wong, asset management director at Amber Hill Capital, told CNBC’s “Street Signs Asia” on Monday after the release of the official PMI data.

Wong said the Asian economic giant is expected to continue on the same path into next year, and could be the only major economy to register growth this year.

Julian Evans-Pritchard, senior China economist at consultancy Capital Economics, pointed out that the most “significant development” in China recently is a recovery in household spending. That’s likely to continue given a tightening labor market and improving consumer sentiment, he explained.

“That should further support the rebound in services activity. It should also boost manufacturing, which will continue to benefit too from supportive fiscal policy and strong foreign demand,” he wrote in a note following the official PMI data release.

China, where cases of Covid-19 were first detected, is among the few economies expected to continue growing this year — but at a much slow pace. The International Monetary Fund has forecast the Chinese economy to expand by 1.9% in 2020, slowing from the 6.1% last year.

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‘No plan’ for economy will work without more access to COVID-19 tests, vaccines: O’Toole – Global News

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 on


Canada will not see economic stability until there is wide access to rapid tests and vaccines for the novel coronavirus, Conservative Party Leader Erin O’Toole says.

O’Toole made the remarks during a press conference Sunday morning.

“There is no plan for the economy if we don’t have rapid testing and vaccines as swiftly as possible,” he told reporters.

Read more:
Canada ‘in the top 5’ on list to receive coronavirus vaccines 1st: minister

O’Toole’s comments come as the federal Liberal government prepares to release a fall economic update on Monday.

The government has not tabled a budget for this fiscal year, but in July delivered what it called a “fiscal snapshot” that estimated the deficit was heading for a record of $343.2 billion.

Story continues below advertisement


Click to play video 'Ottawa to deliver long-awaited economic update amid pandemic'



2:24
Ottawa to deliver long-awaited economic update amid pandemic


Ottawa to deliver long-awaited economic update amid pandemic

O’Toole said there can’t be a “full economy, a growing economy, people working, people being productive without the tools to keep that happening in a pandemic.

“Those two tools are rapid tests and a vaccine,” he said.

O’Toole said Canada is “months behind our allies” when it comes to the large-scale rollout and use of rapid COVID-19 tests.

Health Canada has approved more than three dozen different tests for COVID-19, but only six of them are “point-of-care” versions more commonly referred to as rapid tests.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

Millions of rapid tests have been delivered to the provinces, however, health officials have been slow to utilize them as questions about best use and reliability remain unanswered.


Click to play video 'Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine'



9:26
Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine


Coronavirus: LeBlanc says Canada is in top five to get COVID-19 vaccine

O’Toole also said it appears as though Canada will be “months behind our allies on vaccines.”

Story continues below advertisement

“These are critical tools,” he said. “The vaccine is the hope we’re all looking for.”

Canada has signed contracts to secure 400 million doses of COVID-19 vaccine, however, the federal government says only six million of those doses — enough to vaccinate three million people — will be in the country by early January for distribution once approved by Health Canada.

However, both the United States and Britain have said they expect to have millions of vaccine doses by next month and expect to have larger portions of their populations inoculated more quickly.

Read more:
Coronavirus cases are soaring but Trudeau’s approval ratings hold steady: Ipsos

O’Toole said Canadians are going to be “rightly frustrated” when other countries are “rolling out millions of doses” of COVID-19 vaccines before Canada.

“I hate to see us trailing,” O’Toole said. “I don’t compare ourselves to the worst response, I want Canada’s response to be the best, that’s why I want to see a plan and I want to see a plan for the economy — we need to get people working.”


Click to play video 'Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine'



9:25
Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine


Canada ‘needs a more ambitious procurement program’: Saskatchewan premier on COVID-19 vaccine

O’Toole is not the only one who appears to be frustrated. In an interview with The West Block’s Mercedes Stephenson, Saskatchewan Premier Scott Moe said it is “troubling” that only a small segment of the Canadian population could be vaccinated immediately.

Story continues below advertisement

Moe said the federal government communicated to the country’s premiers how many doses they would receive, adding that the first round of doses will likely treat about 100,000 people in Saskatchewan.

“We need to receive more and we need to receive it in a much more timely fashion,” he said.

Moe said Canada needs a “more ambitious procurement program for sure.”

Prime Minister Justin Trudeau has said Canada’s lack of domestic manufacturing capabilities for the highly sought-after coronavirus vaccines — several of which use brand new mRNA technology — means it will be slightly further back in the queue than countries that produce the vaccines domestically.

Story continues below advertisement

Still, Intergovernmental Affairs Minister Dominic LeBlanc said on The West Block on Sunday that Canada is still positioned to be in the “top five” in the global queue for vaccines.

— With a file from the Canadian Press

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

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