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Georgia Gov. Brian Kemp faces resistance over move to reopen economy – CNN



Kemp, a Republican and staunch ally of President Donald Trump, on Monday announced Georgia would allow nail salons, massage therapists, bowling alleys and gyms to open Friday. In-person church services can resume. And restaurants and movie theaters can open Monday. His order also bars cities from imposing their own restrictions on businesses.
It’s the most aggressive move yet to reopen a state’s economy as Trump optimistically pushes for a May 1 end to some statewide lockdowns. It also came as a surprise to mayors and some members of Kemp’s own coronavirus task force.
In Georgia, mayors are pushing back, some businesses are saying they’ll keep their doors closed and even Trump allies are questioning whether Kemp is moving too quickly.
Analysis: Georgia's reopening is a high-stakes public health bet -- and will likely please Trump
South Carolina Sen. Lindsey Graham, whose state is moving toward a more limited reopening, tweeted Tuesday: “I worry that our friends and neighbors in Georgia are going too fast too soon.”
“We respect Georgia’s right to determine its own fate, but we are all in this together,” Graham, a Republican, said. “What happens in Georgia will impact us in South Carolina.”
Kemp was among the last governors to sign a shelter-in-place order on April 2. He was also mocked for admitting on April 1 that he had only just learned that asymptomatic people could spread the coronavirus — information that had been widely known for months.
Data collected by Johns Hopkins University shows that as of Tuesday, Georgia had seen 19,884 cases of coronavirus and had recorded 802 deaths resulting from the virus.
“In the same way that we carefully closed businesses and urged operations to end to mitigate the virus’ spread, today we’re announcing plans to incrementally and safely reopen sectors of our economy,” Kemp told reporters Monday.
Mayors in Georgia are pushing back against Kemp’s decision.
“I have searched my head and my heart on this and I am at a loss as to what the governor is basing this decision on,” Atlanta Mayor Keisha Lance Bottoms, a Democrat, told CNN.
She said she is considering legal options for a city that she said is “not out of the woods yet.”
“You have to live to fight another day. And you have to be able to be amongst the living to be able to recover,” she said.
Kelly Girtz, the Democratic mayor of Athens, told CNN he would “not in the least” recommend going to gyms, tattoo parlors or bowling alleys on Friday. Gritz said he first wanted to see a dramatic increase in coronavirus testing and a sustained downward trend in confirmed cases.
“We’re not going to frequent businesses right now because we don’t feel safe. We’re not going to return to work,” he said the area’s residents have told him. “I’ve had a number of hair salon owners approach me over the last day and say we’re not opening our doors back up because we care about our employees and we care about our clients.”
Some businesses said they would not follow Kemp’s guidance and would keep their doors closed.
SoulCycle studios in Georgia will not open on Friday even though they’re allowed to, announced Harvey Spevak, the chairman of Equinox Group, which owns SoulCycle. Instead, he said, the company is working with infectious disease experts to determine when and how to reopen.
Celebrities who own Georgia businesses, including former professional wrestler Diamond Dallas Page, who owns a gym, and rapper Killer Mike, who owns barber shops, told TMZ they would not reopen Friday.
Stacey Abrams, Kemp’s 2018 opponent and a 2020 Democratic vice presidential prospect, criticized Kemp’s move Tuesday on MSNBC.
“The worry is that while trying to push a false opening of the economy, we risk putting more lives in danger, and there’s nothing about this that makes sense,” Abrams said.
Georgia’s coronavirus cases have been concentrated most heavily in largely African American regions of the state, raising concerns that opening businesses too quickly would disproportionately hurt black communities.
The virus has hit southwestern Georgia particularly hard. Albany, Georgia, Mayor Bo Dorough said he is “very upset” that mayors have been blocked by Kemp from setting stricter guidelines for businesses to reopen.
“I am hoping that we have passed the peak. But then you read about the possibility of a second wave and I am obviously concerned about that,” Dorough told CNN.
Reginald T. Jackson, the African Methodist Episcopal bishop in the Atlanta region, directed hundreds of AME churches to remain closed Sunday despite Kemp’s order that would allow them to host services.
“There is no need to increase the possibility of more sickness and death by gathering prematurely,” Jackson said in a statement. “We absolutely must increase testing, and flatten the curve before we begin to gather again.”

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Eurozone in fresh emergency action to boost economy – BBC News



The European Central Bank has taken further dramatic measures try to boost the eurozone economies, amid their biggest recession since World War Two.

Just months after emergency measures, the central bank said it would increase the size of its bond buying programme by €600bn (£546bn) to €1.35tn.

The programme will run until June 2021, six months longer than planned.

The move will keep borrowing costs low for countries and firms as they face huge budget deficits and recessions.

The purchases support “funding conditions in the real economy, especially for businesses and households,” the ECB said.

The central bank also decided to hold its interest rates at record lows.

The extra bond buying “is likely to push European government bond yields even further into negative territory, and investors in search of positive returns will be forced to take more risk,” said Rachel Winter, associate investment director at investment firm Killik & Co.

The bond purchases are often referred to as Quantitative Easing (QE). When central banks buy bonds with printed money, the value of the bonds rise and borrowing costs drop.

Some market commentators wonder how much money can safely be printed without causing the value of money to decrease.

‘Fiscal box’

“Although inflation is currently very low, these levels of asset purchases are causing some concern about inflation further down the line,” said Ms Winter.

“Economic theory tells us that that inflation is linked to the supply of money in the economy, and if the money supply is being drastically increased to fund quantitative easing then long-term inflation ought to rise too. These fears of long-term inflation have stoked demand for gold recently.”

Gold is trading at about $1,717 (£1,368) an ounce, down from highs of $1,766 earlier in the month, but up compared to a price of $1,324 one year ago.

In many ways, the ECB is playing catch-up with other central banks, said Neil Williams, senior economic adviser at US-based money manager Federated Hermes.

“After lagging the US and UK, the fiscal box is now opening, he said. The planned spending works out at about €100bn a month, higher than the €80bn spent in the wake of the European sovereign debt crisis, he points out.

The UK added £200bn of bond buying in March.

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Impact of new social unrest on the US economy in two charts – Yahoo Canada Finance



<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="To those Wall Street strategists saying the social unrest currently sweeping the country isn’t enough to derail the market’s shocking rally from the March lows, we present new charts from Goldman Sachs.” data-reactid=”16″>To those Wall Street strategists saying the social unrest currently sweeping the country isn’t enough to derail the market’s shocking rally from the March lows, we present new charts from Goldman Sachs.

In the charts — which you could see below — it’s clear that social unrest as measured by real-time user comments about the economy on Twitter is beginning to weigh on consumer confidence.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Consumer sentiment (left chart) had begun to stabilize in early to mid-May with states reopening and people returning to work after months of COVID-19 lockdowns. But then came the senseless killing of George Floyd by Minnesota police in late May and rampant protests and looting, and a plunge in consumer sentiment per Twitter data analyzed by Goldman.” data-reactid=”20″>Consumer sentiment (left chart) had begun to stabilize in early to mid-May with states reopening and people returning to work after months of COVID-19 lockdowns. But then came the senseless killing of George Floyd by Minnesota police in late May and rampant protests and looting, and a plunge in consumer sentiment per Twitter data analyzed by Goldman.

Meanwhile, negative sentiment on the economy (right chart) as measured by tweets not mentioning coronavirus has spiked over the past week. Some strategists have pushed back on a chart like this one, noting it’s part of a larger issue holding the economy back.

Ultimately it’s hard to determine if weakening consumer confidence over the past two weeks has seriously derailed a U.S. economy already in a sharp recession due to COVID-19. But for those on the Street betting for a V-shaped economic recovery later this year (stat: the S&P 500 is only 7.8% below its February record highs), the data presented by Goldman hints that is far from a sure bet as social unrest is sustained, weighs on consumer psyche and spending decisions.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.” data-reactid=”25″>Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read the latest financial and business news from Yahoo Finance” data-reactid=”26″>Read the latest financial and business news from Yahoo Finance

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”38″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

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Higgs calls for 'cultural shift' to turn N.B.'s economic fortunes around –



Like a malfunctioning time machine, the COVID-19 crisis is threatening to transport New Brunswick’s economy back to where it was in 2010 or earlier, and that has Premier Blaine Higgs calling for radical changes in the province’s work ethic and entrepreneurial instincts coming out of the pandemic.

“We need a cultural shift here in New Brunswick. We need momentum that’s going to be created from this COVID crises,” Higgs said last week during a wide-ranging talk about New Brunswick’s economic problems on the provincial business podcast “Turning Point.”

“This may be a wake-up call for the country and for New Brunswick. I’m hoping we can springboard off of this.”

The explosion at Irving Oil’s refinery in October 2018 cut output and dragged on New Brunswick’s economy throughout 2019. It helped keep growth in provincial GDP below one per cent for the year for the 11th time in the last 13 years. (Submitted by Doug McLean)

On Monday, Statistics Canada reported New Brunswick’s economy had another underwhelming year prior to the pandemic, growing by just 0.98 per cent in 2019. It’s the 11th time in 13 years that growth in the province’s economy has been one per cent or less, ranking lowest among Canada’s ten provinces.  

Economic growth in New Brunswick has been so weak since the global financial crisis of 2008 it is not out of the question for all of the gains of the last decade or longer to be rolled back just this year.

Two weeks ago, New Brunswick’s department of finance projected the province’s economy will shrink by 4.3 per cent in 2020, with an average of private sector forecasts predicting a larger decline of 5.5 per cent.

Contractions of those amounts would send New Brunswick’s economy back to the size it was somewhere between 2007 and 2010, erasing up to 12 years of accumulated growth.

By contrast in better performing neighbouring economies, a five per cent contraction would erase just three years of growth in Nova Scotia, two in Quebec and a little more than one year in P.E.I.

Think bigger 

Higgs often cites international entrepreneur Amarjeet Singh Jatana and his company Canadian National Growers as a model for New Brunswick economic development. The company saw the province as an ideal place to grow and export apples and has established multiple orchards in Kent County without government help to make that happen. (Twitter)

With that as a backdrop, Higgs said New Brunswick needs to forget about deficit spending as a way to stimulate economic activity and apply the collective effort it used to contain the COVID-19 virus to remake the province’s economy.   

He called on entrepreneurs to think bigger about what is possible and on citizens to place more value on work.

“i think we can do a whole lot here in New Brunswick and attitude plays a role — a cultural shift plays a role,” said Higgs.

Claiming a number of New Brunswick firms could grow their businesses through export — but don’t — and a number of citizens could work — but won’t — the premier said it was important to understand what is holding the province back economically and fix it.

Stung by the reluctance of locals to fill jobs left vacant by a short-lived ban on temporary foreign workers, Higgs acknowledged low pay may be causing disincentives to employment in some cases but expressed his own belief that a lack of work ethic in the population is also causing problems.

“I think we have to understand why the jobs that are available here are not jobs we’re proud of and want to be part of,” said Higgs.   

Wage hike?

“Are the wages high enough?  But wages have to be tied with productivity. You do have to see if you’re going to earn more money there has to be a working culture there to support that because they go hand in hand.

“How many of the processors said to me — the farmers, other industries — said to me, ‘You know I need four, five six New Brunswick workers to replace one temporary foreign worker.’ What does that say about us as a society?”

Higgs appeared to make an outdated reference to the operation of the federal government’s employment insurance program, claiming without citing the evidence that too many New Brunswick residents are happy to work for 10 weeks and collect assistance the rest of the year.

“We have a system where people think being on the 10-42 program is a way of life,” said Higgs. 

But according to rules posted by Employment and Social Development Canada that’s not how the employment insurance system works.

Prior to the pandemic New Brunswick residents were required to work a minimum of 490 hours, at least 12 weeks, to qualify for 23 weeks of regular EI benefits in provincial regions with the highest unemployment rates.  

Earning 42 weeks of regular benefits required at least 1,610 hours of work in the previous year, or about 40 weeks of full time work.

Broaden ambitions

In 2018, the company S&P Data was offered $2.2 million by the New Brunswick government to open two business services call centres. In 2019 it closed and laid off all 245 employees. Premier Higgs believes government grants are not the way to create jobs. (Opportunities NB)

The premier also called out business owners who he said need to broaden their ambitions.  

He pointed, as he often does, to entrepreneur Amarjeet Singh Jatana of Canadian National Growers Inc. who three years ago began purchasing hundreds of acres of farmland in Kent County without government help to grow and export apples. Higgs said it is an example of how local businesses often overlook opportunity. 

“They were actually told you can’t do that here in New Brunswick. They have orchards around the world and they looked at our climate and said that’s a really good spot.” said Higgs.

“Sometimes we under-sell ourselves. We can convince ourselves you can’t do that in New Brunswick and that was a clear case. Even the farmers and the associations were like, ‘Oh, they can’t do that here in New Brunswick.'”

Higgs said he hopes the pandemic has shown the province it can come together and achieve important goals, a lesson he wants applied to the economy to end years of lacklustre growth.

“We don’t go back to where we were,” said Higgs.  “We go well beyond where we were.”

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