Consumers are bummed out, but they may be underestimating the health of the economy.
Eight months into Joe Biden’s presidential term, the economy earns a robust B+ grade, according to the Yahoo Finance Bidenomics Report Card. Our report card uses data provided by Moody’s Analytics to compare the Biden economy to that under seven prior presidents, going back to Jimmy Carter in the 1970s. We did the same for President Trump, beginning in 2017.
We track six economic indicators to assess the economy as ordinary people experience it: total employment, manufacturing employment, average hourly earnings, exports, stock prices and GDP per capita. Biden gets top marks in two of those categories—employment and exports—and high marks in three other categories. The weakest Biden numbers relate to earnings, though those have improved recently.
Source: Moody’s Analytics, Yahoo Finance
Timing is a huge factor in every president’s economic performance. Biden took office as the coronavirus vaccines were just becoming available and the pandemic recovery was ramping up. That’s why job gains under Biden have been so strong: employers have been hiring back millions of workers they let go during last year’s sharp downturn. The 4.8 million jobs gained under Biden, in fact, are 70% more than the second-best performance, which was 2.8 million jobs gained at the same point in Jimmy Carter’s presidency.
During Donald Trump’s first 8 months as president, the economy gained 1.4 million jobs. Under Trump’s predecessor, Barack Obama, the economy lost 3.8 million jobs during the same timeframe. Again, timing: Trump took office amid a slow but prolonged recovery that continued until the Covid pandemic ended it in 2020. Obama took office during a brutal recession that had been underway for 13 months and would continue for the first four months of his first term.
Consumer confidence doesn’t reflect the relatively sound state of the economy, at the moment. Confidence rose during Biden’s first four months in office, as the vaccine rollout seemed to promise a return to normalcy. But confidence has fallen since midsummer as the Covid Delta variant kidnapped normalcy. Other pressures weighing on consumers include rising gas prices, product shortages and broader inflation worries. Our report card doesn’t track confidence directly, but other indicators would capture a collapse in confidence if it weakens underlying fundamentals.
Real GDP growth has been strong under Biden, registering the best performance since early in Jimmy Carter’s presidency. But that, too, is something of a distortion, reflecting a strong snapback after last year’s drop in output. Economists in recent weeks have been slashing their growth forecasts due to the Delta slowdown. A recession isn’t in the cards, but consumers can get gloomy when decelerating growth makes it feel like things are going the wrong direction.
Earnings under Biden started out terribly, coming in at the lowest level in three of his first five months. Earnings have picked up a bit since then, but this is yet another pandemic peculiarity. Average earnings soared in the pandemic’s early days, because lower-income workers were far more likely to lose their jobs, pushing average earnings up among those still working. Lower-income workers are returning, but average earnings remain jumpy. They might be going up as employers raise pay to attract workers, but it’s not clear if recent gains will hold.
Stocks, of course, soared after the first month of the pandemic, thanks largely to extraordinary monetary stimulus measures by the Federal Reserve. They’re still up under Biden, though the market registered bigger gains at the same point in Obama’s presidency, and in George H. W. Bush’s.
Presidents tend to get more credit or blame for the economy’s performance than they deserve. Many factors influence the economy, from international trends to asset bubbles that could brew for years before erupting. Our report card does not suggest that Biden’s policies are responsible for the direction of the economy under his watch. But voters will reward or punish Biden and his fellow Democrats as if they are, which is why we put the Biden economy in historical context.
The economy can also drift beyond any president’s ability to control it. Jimmy Carter, for instance, would have had a B+ grade, like Biden, eight months into his presidency. But by the end of his one-term presidency, inflation had eroded wage growth, output had slowed and Carter’s economic performance dropped to a C+. The Trump economy average B+ during his first year, but drooped to a C during his last, as the Covid pandemic snarled everything. Obama, by contrast, improved modestly, from a C to a B- during the same timeframe. Biden no doubt wants to improve on his former boss’s record.
OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.
Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.
The change is scheduled to come into force on Nov. 8.
As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.
The program has also come under fire for allegations of mistreatment of workers.
A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.
In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.
The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.
According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.
The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.
Temporary foreign workers in the agriculture sector are not affected by past rule changes.
This report by The Canadian Press was first published Oct. 21, 2024.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
