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Economy loses jobs in December, first decline since April

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The U.S. economy shed jobs for the first time in eight months in December as the country buckled under an onslaught of COVID-19 infections, suggesting a significant loss of momentum that could temporarily stall the recovery from the pandemic. Reuters

The U.S. economy shed jobs for the first time in eight months in December as the country buckled under an onslaught of COVID-19 infections, suggesting a significant loss of momentum that could temporarily stall the recovery from the pandemic.

Non-farm payrolls decreased by 140,000 jobs last month, the U.S. Labour Department said on Friday. Data for November was revised up to show 336,000 jobs added instead of 245,000 as previously reported. That was the first decline in payrolls since April. The economy has recovered just over half of the 22.2 million jobs lost in March and April.

The unemployment rate was at 6.7 per cent in December.

Despite the labour market weakness, the economy is unlikely to fall back into recession, with a backstop of nearly US$900-billion in additional pandemic relief approved by the government last week.

More fiscal stimulus is expected now that the Democrats have gained control of the U.S. Senate, boosting the prospects for president-elect Joe Biden’s legislative agenda. Congress on Thursday formally certified Mr. Biden’s election victory hours after hundreds of President Donald Trump’s supporters stormed the U.S. Capitol.

There is also optimism that the rollout of coronavirus vaccines will be better co-ordinated under the Biden administration. COVID-19 cases in the United States have jumped to more than 21 million, with the death toll exceeding 356,000 since the virus first emerged in China in late 2019, according to the U.S. Centers for Disease Control and Prevention.

Still, the employment report joined a raft of other weak data on consumer confidence and spending in underscoring the virus’ brutal impact on the economy.

“The economy will be on the soft side for the next several months, but with fiscal support and vaccines, the economy should kick into higher gear by summer,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Penn.

The economy is believed to have expanded at around a 5-per-cent annualized rate in the fourth quarter, with the bulk of the rise in gross domestic product seen coming from inventory investment. It grew at a historic 33.4-per-cent pace in the third quarter after shrinking at a 31.4-per-cent rate in the April-June period, the deepest since the government started keeping records in 1947.

 

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Canadian economy posts worst showing on record in 2020 – Global News

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The Canadian economy posted its worst showing on record in 2020 as the COVID-19 pandemic swept across the country shutting down businesses and putting people out of work.

Statistics Canada says real gross domestic product shrank 5.4 per cent in 2020, the steepest annual decline since comparable data was first recorded in 1961.

The drop for the year was due to the shutdown of large swaths of the economy in March and April during the first wave of the COVID-19 pandemic that crushed the economy.

Since then, economic activity has slowly and steadily grown.

Read more:
Canada’s small businesses now have $135B in debt due to COVID-19, CFIB estimates

Statistics Canada says the economy grew at an annualized rate of 9.6 per cent in the fourth quarter of last year, down from an annualized growth rate of 40.6 per cent in the third quarter.

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That was higher than expected, with the average economist estimate at 7.5 per cent, according to financial data firm Refinitiv.

However, despite the better-than-expected result for the quarter as a whole, December eked out a 0.1 per cent increase, which followed a 0.8 per cent increase in November.

Read more:
Governor of Bank of Canada points to child care, education to help ease protracted employment recovery

Statistics Canada noted that total economic activity in December was about three per cent below the pre-pandemic level in February 2020.

Looking ahead to January, Statistics Canada said its early estimate was for growth in the economy of 0.5 per cent.

CIBC chief economist Avery Shenfeld wrote in a note that the early January figure should set aside fears of an outright downturn in the first quarter.


Click to play video 'Coronavirus: Canada’s economy could suffer in 1st quarter of 2021 with rising COVID-19 infections'



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Coronavirus: Canada’s economy could suffer in 1st quarter of 2021 with rising COVID-19 infections


Coronavirus: Canada’s economy could suffer in 1st quarter of 2021 with rising COVID-19 infections – Dec 15, 2020

Statistics Canada said wholesale trade, manufacturing and construction sectors led the increase, while retail trade fell to start the year.

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BMO chief economist Douglas Porter said the economy soldiered through second-wave restrictions better than anticipated, and may signal a better-than-anticipated quarter, and potentially year overall.

“Look for new growth drivers to kick into gear as the economy re-opens in stages through this year, leading to roughly (six-per-cent) growth – a nice mirror image to last year’s deep dive,” he wrote in a note.

“It’s not precisely a V-shaped recovery, but it’s very close.”

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Canadian economy contracted 5.4 per cent in 2020, worst year on record – The Tri-City News

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OTTAWA — The Canadian economy posted its worst showing on record in 2020 as the COVID-19 pandemic swept across the country, shutting down businesses and putting millions out of work.

Statistics Canada says real gross domestic product shrank 5.4 per cent in 2020, the steepest annual decline since comparable data was first recorded in 1961.

The drop for the year was due to the shutdown of large swaths of the economy in March and April during the first wave of the COVID-19 pandemic that crushed the economy.

Since then, economic activity has slowly and steadily grown.

Statistics Canada says the economy grew at an annualized rate of 9.6 per cent in the fourth quarter of last year, down from an annualized growth rate of 40.6 per cent in the third quarter.

That was higher than expected, with the average economist estimate at 7.5 per cent, according to financial data firm Refinitiv.

However, despite the better-than-expected result for the quarter as a whole, December eked out a 0.1 per cent increase, which followed a 0.8 per cent increase in November.

Statistics Canada noted that total economic activity in December was about three per cent below the pre-pandemic level in February 2020.

Looking ahead to January, Statistics Canada said its early estimate was for growth in the economy of 0.5 per cent. 

CIBC chief economist Avery Shenfeld wrote in a note that the early January figure should set aside fears of an outright downturn in the first quarter.

Statistics Canada said wholesale trade, manufacturing and construction sectors led the increase, while retail trade fell to start the year.

BMO chief economist Douglas Porter said the economy soldiered through second-wave restrictions better than anticipated, and may signal a better-than-anticipated quarter, and potentially year overall.

“Look for new growth drivers to kick into gear as the economy re-opens in stages through this year, leading to roughly (six-per-cent) growth  — a nice mirror image to last year’s deep dive,” he wrote in a note.

“It’s not precisely a V-shaped recovery, but it’s very close.”

This report by The Canadian Press was first published March 2, 2021.

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2020 was the worst year on record for Canada's economy. It shrank by 5.4% – CBC.ca

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Canada’s economy shrank by 5.4 per cent last year, official data from Statistics Canada showed Monday, making 2020 the worst year for the country’s economic output since record keeping began.

The data agency said Tuesday that Canada’s gross domestic product — the total value of all goods and services it produced — grew by 2.3 per cent during the last three months of the year, but that was nowhere near enough to offset the record-setting plunge it experienced during the the middle half of 2020.

Since bottoming out in the spring and early summer, economic activity has slowly, steadily grown.

For comparison purposes, Canada’s economy contracted almost twice as much as the U.S. did during the COVID-19 pandemic, despite the U.S. seeing far more cases per capita.

Preliminary data suggests the U.S. economy shrank by 3.5 per cent last year.

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