Economy
July jobs report: Economy added back 1.763 million payrolls in July, unemployment rate fell to 10.2% – Yahoo Canada Finance
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The US economy regained fewer jobs in July after a record gain in June, as a resurgence of coronavirus cases in some states earlier this summer weighed on the labor market recovery. However, the number of jobs added topped estimates, and the unemployment rate fell more than expected.” data-reactid=”16″>The US economy regained fewer jobs in July after a record gain in June, as a resurgence of coronavirus cases in some states earlier this summer weighed on the labor market recovery. However, the number of jobs added topped estimates, and the unemployment rate fell more than expected.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Department of Labor’s July jobs report was released at 8:30 a.m. ET Friday. Here were the main metrics in the report, compared to consensus estimates compiled by Bloomberg:” data-reactid=”17″>The Department of Labor’s July jobs report was released at 8:30 a.m. ET Friday. Here were the main metrics in the report, compared to consensus estimates compiled by Bloomberg:
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Change in non-farm payrolls: +1.783 million vs. +1.48 million expected and +4.791 million in June
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Unemployment rate: 10.2% vs. 10.6% expected and 11.1% in June
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Average hourly earnings, month over month: +0.2% vs. -0.5% expected and -1.3% in June
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Average hourly earnings, year over year: +4.8% vs. +4.2% expected and +4.9% in June
The change in total non-farm payrolls for June was revised down slightly by 9,000 to 4.791 million, while May’s payrolls were revised up by 26,000 to 2.725 million.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Contracts on the three major US stock indices pared overnight losses after the better-than-expected July print was released.” data-reactid=”24″>Contracts on the three major US stock indices pared overnight losses after the better-than-expected July print was released.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="July marked the third straight month that the economy added jobs on net. However, even with the past several months of gains, the economy has not made up the entirety of the lost jobs since the start of the pandemic – especially after April’s record drop of more than 20 million payrolls.” data-reactid=”25″>July marked the third straight month that the economy added jobs on net. However, even with the past several months of gains, the economy has not made up the entirety of the lost jobs since the start of the pandemic – especially after April’s record drop of more than 20 million payrolls.
In July, the number of unemployed individuals on temporary layoffs fell by 1.3 million to 9.2 million. That was half of April’s level, as Americans began returning to work following temporary virus-related business closures. However, the number of permanent job losers held steady in July over the prior month at 2.9 million, underscoring the longer-lasting impact to the labor market due to the pandemic.
The services sector again led non-farm payroll gains in July, after the services economy was cut deeply by shelter in place orders and business closures earlier on this year. The leisure and hospitality industry added back 592,000 jobs after gaining nearly 2 million in June, and retail trade jobs increased by 258,000 in July after a rise of more than 800,000 during the prior month.
Within services, information-related industries were the only group to shed jobs on net in July, losing 15,000. Within the goods-producing sector, mining and logging jobs fell by 7,000.
Government jobs rose by 301,000 in July, after an increase of 54,000 in June.
Elsewhere, the jobless rate improved by a greater than expected margin to 10.2% in July from 11.1% in June. However, the unemployment rate remained above the the Global Financial Crisis peak of 10.0%, and more than double the 3.5% rate from February before the spread of the pandemic in the U.S.
Average hourly wages unexpectedly rose on a month over month basis by 0.2%, following a revised 1.3% decline in June. Consensus economists had expected to see average hourly earnings moderate and decline 0.5% on a monthly basis, due to compositional effects as low-wage workers reentered the workforce following shutdowns.
As had been the case since the start of the pandemic, the dispersion among estimates for July’s change in non-farm payrolls was elevated.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On the high end, a handful of economists estimated that the economy added back at least 3 million jobs during the month, or double the median estimate. Several, however, expected that non-farm payrolls declined by several hundred thousand. US employers added back more jobs than expected in each of the three latest jobs reports.” data-reactid=”44″>On the high end, a handful of economists estimated that the economy added back at least 3 million jobs during the month, or double the median estimate. Several, however, expected that non-farm payrolls declined by several hundred thousand. US employers added back more jobs than expected in each of the three latest jobs reports.
Still, economists convened on the notion that the pace of recovery in the labor market decelerated since June, due to both the sunsetting of enhanced federal unemployment benefits and the reimposition of stay-in-place measures in some states.
“The 1.763 million increase in non-farm payrolls in July confirms that the resurgence in new virus cases caused the economic recovery to slow, but also underlines that it has not yet gone into reverse,” said Andrew Hunter, senior economist for Capital Economics. “With new infections now trending clearly lower again and high-frequency activity indicators showing tentative signs of a renewed upturn, employment should continue to rebound over the coming months.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Plus, the closely watched ADP National Employment Report released Wednesday showed private payrolls rose by a meager 167,000 in July. Consensus economists had expected private employers added back 1.2 million payrolls, after an upwardly revised 4.3 million additions in June.” data-reactid=”52″>Plus, the closely watched ADP National Employment Report released Wednesday showed private payrolls rose by a meager 167,000 in July. Consensus economists had expected private employers added back 1.2 million payrolls, after an upwardly revised 4.3 million additions in June.
The ADP report, however, has historically been an imprecise indicator of the “official” government-issued employment report. ADP’s initial print for May, June and now July payroll additions each ultimately undershot the data reflected in the Labor Department’s monthly reports.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This post is breaking. Check back for updates.” data-reactid=”54″>This post is breaking. Check back for updates.
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck” data-reactid=”56″>Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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Economy
Climate Change Will Cost Global Economy $38 Trillion Every Year Within 25 Years, Scientists Warn – Forbes
Topline
Climate change is on track to cost the global economy $38 trillion a year in damages within the next 25 years, researchers warned on Wednesday, a baseline that underscores the mounting economic costs of climate change and continued inaction as nations bicker over who will pick up the tab.
Key Facts
Damages from climate change will set the global economy back an estimated $38 trillion a year by 2049, with a likely range of between $19 trillion and $59 trillion, warned a trio of researchers from Potsdam and Berlin in Germany in a peer reviewed study published in the journal Nature.
To obtain the figure, researchers analyzed data on how climate change impacted the economy in more than 1,600 regions around the world over the past 40 years, using this to build a model to project future damages compared to a baseline world economy where there are no damages from human-driven climate change.
The model primarily considers the climate damages stemming from changes in temperature and rainfall, the researchers said, with first author Maximilian Kotz, a researcher at the Potsdam Institute for Climate Impact Research, noting these can impact numerous areas relevant to economic growth like “agricultural yields, labor productivity or infrastructure.”
Importantly, as the model only factored in data from previous emissions, these costs can be considered something of a floor and the researchers noted the world economy is already “committed to an income reduction of 19% within the next 26 years,” regardless of what society now does to address the climate crisis.
Global costs are likely to rise even further once other costly extremes like weather disasters, storms and wildfires that are exacerbated by climate change are considered, Kotz said.
The researchers said their findings underscore the need for swift and drastic action to mitigate climate change and avoid even higher costs in the future, stressing that a failure to adapt could lead to average global economic losses as high as 60% by 2100.
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How Do The Costs Of Inaction Compare To Taking Action?
Cost is a major sticking point when it comes to concrete action on climate change and money has become a key lever in making climate a “culture war” issue. The costs and logistics involved in transitioning towards a greener, more sustainable economy and moving to net zero are immense and there are significant vested interests such as the fossil fuel industry, which is keen to retain as much of the profitable status quo for as long as possible. The researchers acknowledged the sizable costs of adapting to climate change but said inaction comes with a cost as well. The damages estimated already dwarf the costs associated with the money needed to keep climate change in line with the limits set out in the 2015 Paris Climate Agreement, the researchers said, referencing the globally agreed upon goalpost set to minimize damage and slash emissions. The $38 trillion estimate for damages is already six times the $6 trillion thought needed to meet that threshold, the researchers said.
Crucial Quote
“We find damages almost everywhere, but countries in the tropics will suffer the most because they are already warmer,” said study author Anders Levermann. The researcher, also of the Potsdam Institute, explained there is a “considerable inequity of climate impacts” around the world and that “further temperature increases will therefore be most harmful” in tropical countries. “The countries least responsible for climate change” are expected to suffer greater losses, Levermann added, and they are “also the ones with the least resources to adapt to its impacts.”
What To Watch For
The fundamental inequality over who is impacted most by climate change and who has benefited most from the polluting practices responsible for the climate crisis—who also have more resources to mitigate future damages—has become one of the most difficult political sticking points when it comes to negotiating global action to reduce emissions. Less affluent countries bearing the brunt of climate change argue wealthy nations like the U.S. and Western Europe have already reaped the benefits from fossil fuels and should pay more to cover the losses and damages poorer countries face, as well as to help them with the costs of adapting to greener sources of energy. Other countries, notably big polluters India and China, stymie negotiations by arguing they should have longer to wean themselves off of fossil fuels as their emissions actually pale in comparison to those of more developed countries when considered in historical context and on a per capita basis. Climate financing is expected to be key to upcoming negotiations at the United Nations’s next climate summit in November. The COP29 summit will be held in Baku, the capital city of oil-rich Azerbaijan.
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Article content
Growth in gross domestic product (GDP), the total value of all goods and services produced in the economy annually, is one of the most frequently cited indicators of economic performance. To assess Canadian living standards and the current health of the economy, journalists, politicians and analysts often compare Canada’s GDP growth to growth in other countries or in Canada’s past. But GDP is misleading as a measure of living standards when population growth rates vary greatly across countries or over time.
Article content
Federal Finance Minister Chrystia Freeland recently boasted that Canada had experienced the “strongest economic growth in the G7” in 2022. In this she echoes then-prime minister Stephen Harper, who said in 2015 that Canada’s GDP growth was “head and shoulders above all our G7 partners over the long term.”
Article content
Unfortunately, such statements do more to obscure public understanding of Canada’s economic performance than enlighten it. Lately, our aggregate GDP growth has been driven primarily by population and labour force growth, not productivity improvements. It is not mainly the result of Canadians becoming better at producing goods and services and thus generating more real income for their families. Instead, it is a result of there simply being more people working. That increases the total amount of goods and services produced but doesn’t translate into increased living standards.
Let’s look at the numbers. From 2000 to 2023 Canada’s annual average growth in real (i.e., inflation-adjusted) GDP growth was the second highest in the G7 at 1.8 per cent, just behind the United States at 1.9 per cent. That sounds good — until you adjust for population. Then a completely different story emerges.
Article content
Over the same period, the growth rate of Canada’s real per person GDP (0.7 per cent) was meaningfully worse than the G7 average (1.0 per cent). The gap with the U.S. (1.2 per cent) was even larger. Only Italy performed worse than Canada.
Why the inversion of results from good to bad? Because Canada has had by far the fastest population growth rate in the G7, an average of 1.1 per cent per year — more than twice the 0.5 per cent experienced in the G7 as a whole. In aggregate, Canada’s population increased by 29.8 per cent during this period, compared to just 11.5 per cent in the entire G7.
Starting in 2016, sharply higher rates of immigration have led to a pronounced increase in Canada’s population growth. This increase has obscured historically weak economic growth per person over the same period. From 2015 to 2023, under the Trudeau government, real per person economic growth averaged just 0.3 per cent. That compares with 0.8 per cent annually under Brian Mulroney, 2.4 per cent under Jean Chrétien and 2.0 per cent under Paul Martin.
Recommended from Editorial
Canada is neither leading the G7 nor doing well in historical terms when it comes to economic growth measures that make simple adjustments for our rapidly growing population. In reality, we’ve become a growth laggard and our living standards have largely stagnated for the better part of a decade.
Ben Eisen, Milagros Palacios and Lawrence Schembri are analysts at the Fraser Institute.
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