Treasury Secretary Steven Mnuchin said on Wednesday that he did not expect an economic relief package to be enacted before the Nov. 3 election as he and Speaker Nancy Pelosi of California have continued to struggle to reach an agreement on a broad package to support the economy.
Negotiators on Wednesday resumed discussions over a coronavirus relief package, even though Democrats and Republicans remain wildly divided over the scope and size of another stimulus bill.
Speaking at a Milken Institute conference on Wednesday, Mr. Mnuchin said that his conversation with Ms. Pelosi was “comprehensive” but indicated that important differences remained. He said that it was unlikely that a deal could be reached an enacted before the election.
“At this point, getting something done before the election and executing on that will be difficult,” Mr. Mnuchin said.
Ms. Pelosi and Mr. Mnuchin spoke on Wednesday for about an hour, discussing the language of the administration’s latest $1.8 trillion framework as compared to House Democrats’ $2.2 trillion stimulus plan, which Ms. Pelosi pushed through the House earlier this month.
They agreed to speak again on Thursday.
“One major area of disagreement continues to be that the White House lacks an understanding of the need for a national strategic testing plan,” Drew Hammill, a spokesman for Ms. Pelosi, said on Twitter. “The Speaker believes we must reopen our economy & schools safely & soon, & scientists agree we must have a strategic testing plan.”
The Treasury secretary suggested that the gap on the top-line cost of the bill were not that wide, but that the differences on the policies within a package remained significant. He said that the White House had already made big compromises on funding for state and local governments and that Republicans continued to want liability protections for businesses that were seeking to reopen during the pandemic.
“We continue to make progress on certain issues, on certain issues we continue to be far apart,” he said.
Mr. Mnuchin criticized Democrats for insisting on a comprehensive bill and not passing smaller bills on areas where the two sides agreed. He said that people and businesses needed immediate assistance and estimated that there was $300 billion unused relief money that could be repurposed with Congressional approval.
“Let’s not wait for the big bang and everything being perfect,” he said.
President Trump has pushed negotiators to “go big!!!” days after abruptly ending talks, but Senate Republicans remain reluctant to accept a broad sweeping bill, citing concerns about the cost of such a package after approving nearly $3 trillion in legislation earlier this year.
Senator Mitch McConnell of Kentucky, the majority leader, has said he plans to have the Senate vote to advance a scaled-back bill that would amount to a fraction of the $2.2 trillion bill Ms. Pelosi has demanded, but that is unlikely to pass without the Democratic support needed to clear the 60-vote threshold.
Wall Street dropped on Wednesday, turning lower after a quiet start to the day after Treasury Secretary Steven Mnuchin said it was unlikely that the White House and Democrats would be able to reach a deal on a new economic aid package before the election.
The S&P fell by about half a percent, a relatively small decline that reflects the fact that investors had already stopped expecting an agreement anytime soon. Still, the slide came immediately after Mr. Mnuchin made his comments at a Milken Institute conference.
“At this point, getting something done before the election and executing on that will be difficult,” Mr. Mnuchin said.
Investors have been regrouping this week after stocks surged in the first two weeks of October, in part on hopes that a stimulus deal would come together. Investors are also wary of the upcoming election — and the uncertainty that might follow a close race.
Also drawing investors’ attention are earnings reports from companies that offer a glimpse of how they are handling the economic slump caused by the coronavirus pandemic. Among the companies to report their results on Wednesday, Goldman Sachs rose slightly after reporting a jump in revenue from its trading business. Wells Fargo and Bank of America were both sharply lower after their results.
Pilgrim’s Pride, the giant U.S. poultry producer, jumped in early trading after it said it would pay more than $110 million to settle federal charges it helped fix prices on chicken. In June, the company’s chief executive and three other current and former executives at companies that supply chicken to groceries and restaurants across the United States were indicted on a price-fixing charge.
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President Trump on Wednesday talked up his pre-pandemic economic record and painted a dark picture of the economy if Democrats win November’s election, suggesting he would return the U.S. back to strength in a second term.
Mr. Trump, who has accused state and local governments of holding back the recovery by restricting business activity, also argued that young and healthy people should get back to work.
In webcast remarks before the Economic Club of New York, along with clubs in Chicago, Pittsburgh, Washington, Florida and Sheboygan, Wisc., Mr. Trump warned of “crippling poverty” and a “steep depression” under Democrats, who he said would usher in “very high taxes.”
Mr. Trump’s comments come as his campaign tries to renew focus on economic issues, where the president has outpolled his Democratic rival, Joseph R. Biden Jr., despite trailing in national head-to-head matchups overall. Even after the nation’s plunge into recession amid the spreading pandemic this spring, voters continue to give Mr. Trump higher marks on the economy than any other major issue.
In his speech, the president offered a preview — but few details — of the economic policies he would pursue in a second term, should he win one. He vowed to cut taxes for the middle class, echoing a promise he made before the 2018 midterm elections, after which he did not propose a new middle-class tax cut plan. He threatened to impose tariffs on companies that move activity abroad from the United States and bar those companies from receiving federal contracts.
Part of Mr. Trump’s enduring appeal on economic issues has been his relentless cheerleading of his own performance, which he continued in the speech, often exaggerating his achievements or claiming results that are not actually true.
Mr. Trump said the administration and Congress’ economic response to the pandemic crisis had helped to fuel a rapid rebound.
While it is true that jobs have returned rapidly, the rebound has happened so quickly in large part because employers cut jobs swiftly — and temporarily — amid widespread state and local lockdowns early in the pandemic. Only about half of the 22 million jobs slashed between February and April have returned.
The unemployment rate, which declined to 7.9 percent from 14.7 percent in April, has fallen faster than most analysts had forecast. But economists warn that the improvement could slow, especially as job losses increasingly turn permanent. S&P Global economists warned on Wednesday that the unemployment rate will not reach pre-pandemic levels until 2024.
Goldman Sachs had a significantly more profitable quarter than expected, lifted by continued strength in the trading of stocks and bonds and gains from certain investments.
The bank reported earnings of $3.62 billion, far higher than Wall Street analysts had projected, and revenue of $10.78 billion for the third quarter.
At a time when the markets were particularly active, Goldman continued its winning streak in trading, with significant gains from handling bond products tied to interest rates, mortgages, corporate credit and commodity prices, which together drove bond division revenue up 49 percent from the same period last year. Stock trading revenue was also higher, but by a less substantial margin.
Revenue in the firm’s asset-management division was up 71 percent, driven by investments in stocks held by Goldman.
Company shares rose nearly 4 percent in early trading.
Lower credit losses expected
Bank of America earned $4.9 billion in the third quarter, up from $3.5 billion in the second quarter, but down from $5.8 billion in the same period a year ago.
Revenue fell 11 percent from a year ago, to $20.3 billion.
The bank’s quarterly provision for credit losses was smaller than the previous quarter, at $1.4 billion in the third quarter, compared with $5.1 billion. The bank said it was expecting fewer losses in its consumer loans, but more in its commercial loans, particularly in industries hit hard by the coronavirus pandemic such as travel and entertainment.
Layoffs add to expenses
Third-quarter earnings for Wells Fargo were $2 billion on revenue of $18.9 billion.
The bank’s earnings were affected by the cost of a round of layoffs — $718 million. Another expense the bank faced in the third quarter: nearly $1 billion trying to help customers struggling to repay their loans come up with new payment plans to keep them from defaulting.
Both Bank of America and Wells said robust activity on Wall Street helped strengthen their earnings.
A group of tech, finance, media and other executives are calling on Americans to stay cool during a heated election season. “The health of our economy and markets depends on the strength of our democracy,” the LinkedIn co-founder Reid Hoffman said in a statement signed by more than 50 business leaders, published first in Wednesday’s DealBook newsletter.
The group, convened by the Leadership Now Project, also includes Eddie Fishman, the chief operating officer of D.E. Shaw; Seth Klarman, the chief executive of Baupost Group; Lisa Lewin, the chief executive of General Assembly; Marissa Mayer, the former Yahoo and Google executive; and Alan Patricof, the founder of Apax and Greycroft.
The executives expressed support for three principles:
“America has successfully held elections through previous challenges, like the Civil War, World Wars I and II, and the 1918 flu pandemic,” the statement concludes. “Now, it is our turn.”
The statement is a testament to the times. “Nothing about 2020 is usual,” said Michael Porter of Harvard Business School, who advises the Leadership Now Project. He said there was “an essential role for business in addressing political dysfunction,” citing recent data showing that political gridlock is causing a “disastrous decline” in the United States’ competitiveness.
A contested election is a big worry for business. If recent market moves are any indication, businesses are making peace with the possibility of higher taxes under a Biden administration as a trade-off for a definitive election result. Some Wall Street advisers have been preparing clients for the possibility of a contested election, as President Trump repeatedly casts doubt on mail-in ballots and is noncommittal on what he will do if he loses the vote.
That’s why some executives, like the group putting their names to the Leadership Now missive, may feel the need to state what was once obvious.
For some companies, the only response to the pandemic has been to hunker down and try to avoid running out of cash before their customers can return.
Pret, the 37-year-old British sandwich and coffee chain that’s ubiquitous in central London, is now clearly willing to try anything, Eshe Nelson reports:
Pret wants to sell its food in supermarkets, and has already begun selling coffee beans on Amazon.com.
It has signed up to all the major food delivery platforms to bring its sandwiches, soups and salads to its work-from-home customers.
It opened a so-called dark kitchen in North London to prepare its food strictly for delivery, modeled on the success of Sweetgreen and Shake Shack, and hopes to open another dark kitchen in either New York or New Jersey soon.
And then there is the coffee subscription, an effort to drive people back to the stores: Five drinks a day made by a barista (coffees, teas and smoothies) for £20 a month. On the face of it, it could be an extraordinarily good deal. With two lattes a week, a subscriber will break even. And the first month is free. (Small print: You can’t order five drinks at once — there must be 30 minutes between each drink order.)
Starbucks announced new commitments to inclusion, diversity and equity on Wednesday, following up on pledges the company made to fight racism in June after the killing of George Floyd in police custody.
The company said it would achieve representation of Black, Indigenous and people of color of at least 30 percent at all corporate levels and at least 40 percent at all retail and manufacturing roles by 2025. Starbucks also released diversity data that showed that its work force is 69 percent female and 47 percent Black, Indigenous and people of color.
The coffee chain also said it would incorporate “measurements focused on building inclusive and diverse teams” into executive compensation programs starting in 2021.
In 2018, two African-American men were arrested at a Starbucks in Philadelphia, leading the company to apologize in full-page newspaper ads and to require companywide anti-bias training.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.