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Manulife Sees Markets, Economy Diverging Through 2nd Virus Wave – BNN

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(Bloomberg) — Canada’s economy and financial markets are moving in opposite directions as investors drive up asset prices in response to cheap-money policies. That trend will continue in the months ahead, according to Manulife’s Frances Donald.

The country is grappling with a fresh set of lockdowns as governments try to quell a wave of Covid-19 infections. Quebec, the second-largest provincial economy, is likely to unveil new restrictions Wednesday that will shut down the construction sector. Less than 1% of the population has been vaccinated so far, putting Canada behind the U.S. and U.K.

Meanwhile, the S&P/TSX Composite Index is near a record after rising about 8% in three months. Economically-sensitive energy and industrial stocks have surged, while bank shares are up 14% since Oct 5.

While vaccines have arrived, “the economic benefits are probably not solved before the second half of the year,” Donald, global chief economist and head of macro strategy at Manulife Investment Management, said by phone. “In 2021, my suspicion is the disconnect between the economy and markets continues.”

Economists are still predicting a strong recovery in the second half of the year, as vaccines allow for a rebound in travel, entertainment and other sectors that have been crushed by the pandemic. Even so, Donald doesn’t see a full recovery until 2022. That’s because there will be structural scarring to the economy from business closures, job losses and new ways of working.

“When we have a shock to the labor market it can take a decade to heal itself,” she said. “While Canada has fared better on most every account relative to the U.S., in large part because of huge amounts of stimulus, we’re not going to come out of this completely unscathed.”

‘Numb’ to Data

That stimulus includes hundreds of billions in fiscal measures by Justin Trudeau’s government and accommodative policy by the Bank of Canada, which, like other central banks, has cut interest rates to historic lows.

It’s a global phenomenon that has pushed up the price of unconventional assets like Bitcoin.

“What you’re seeing in crypto right now is growing concern we have excessive monetary policy at play,” Donald said. “It’s likely we continue to see too much cash flow into places we haven’t seen before.”

Read more: Bitcoin Tops $35,000 for Fresh Record as Wild Swings Resume

Investors are becoming “more numb” to official statistics including inflation and payrolls and are focusing instead on economic data that can be measured with less lag time, such as restaurant bookings and airport security checkpoints, Donald said.

“Much of 2020 was spent recognizing traditional data were too lagged and too distorted to be valuable,” she said. “So in come new unconventional data points that showed us there were faster and more efficient ways to see where the economy was in its rebound.”

©2021 Bloomberg L.P.

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Biden's rescue plan will give U.S. economy significant boost: Reuters poll – The Guardian

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By Indradip Ghosh and Richa Rebello

BENGALURU (Reuters) – U.S. President Joe Biden’s proposed fiscal package will boost the coronavirus-hit economy significantly, according to a majority of economists in a Reuters poll, and they expect it to return to its pre-COVID-19 size within a year.

Biden has outlined a $1.9 trillion stimulus package proposal to jump-start the world’s largest economy, which has been at the epicenter of the COVID-19 pandemic having lost over 400,000 lives, fueling optimism and sending Wall Street stocks to record highs on Thursday.

Hopes for an upswing in U.S. economic growth, helped by the huge stimulus plan, was reflected in the Jan. 19-22 Reuters poll of more 100 economists.

In response to an additional question, over 90%, or 42 of 46 economists, said the planned fiscal stimulus would boost the economy significantly.

“There are crosswinds to begin 2021 as fiscal stimulus helps to offset the virus and targeted lockdowns. The vaccine rollout will neutralize the latter over the course of the year,” said Michelle Meyer, U.S. economist at Bank of America Securities.

“And upside risks to our…growth forecast are building if the Democrat-controlled government can pass additional stimulus. The high level of virus cases is extremely disheartening but the more that the virus weighs on growth, the more likely that stimulus will be passed.”

For a Reuters poll graphic on the U.S. economic outlook:

https://fingfx.thomsonreuters.com/gfx/polling/oakveynqovr/Reuters%20Poll%20-%20U.S.%20economy%20outlook.png

The U.S. economy, which recovered at an annualized pace of 33.4% in the third quarter last year from a record slump of 31.4% in the second, grew 4.4% in the final three months of the year, the poll suggested.

Growth was expected to slow to 2.3% in the current quarter – marking the weakest prediction for the period since a poll in February 2020 – amid renewed restrictions.

But it was then expected to accelerate to 4.3%, 5.1%, 4.0% in the subsequent three quarters, a solid upgrade from 3.8%, 3.9% and 3.4% predicted for those periods last month.

On an annual basis, the economy – after likely contracting 3.5% last year – was expected to grow 4.0% this year and 3.3% in 2022, an upgrade from last month.

For a graphic on Reuters Poll – U.S. economy and Fed monetary policy – January 2021:

https://fingfx.thomsonreuters.com/gfx/polling/azgpoljbkvd/U.S.%20economy.PNG

Nearly 90%, or 49 of 56 economists, who expressed a view said that the U.S. economy would reach its pre-COVID-19 levels within a year, including 16 who expected it to do so within six months.

“Even without the stimulus package, we had already thought the economy would get back to pre-COVID levels by the middle of this year,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets.

“With the new stimulus package there will be more direct money in people’s pockets, easily boosting the economy, provided a vaccine rollout progresses in a constructive manner.”

But unemployment was not predicted to fall below its pre-pandemic levels of around 3.5% until 2024 at least.

When asked what was more likely for inflation this year, only one said it would ease. The other 40 economists were almost evenly split between “a significant pickup” and price pressures remaining “about the same as last year.”

Still, the core Personal Consumption Expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – was forecast to average below the target of 2% on an annual basis until 2024 at least, prompting the central bank to keep interest rates unchanged near zero over the forecast horizon.

“I don’t think it will be an increase in underlying (inflation) trend, it is sort of a rebound in prices that have been depressed during the pandemic,” said Scott Brown, chief economist at Raymond James.

(For other stories from the Reuters global long-term economic outlook polls package:)

(Reporting by Indradip Ghosh and Richa Rebello; Additional reporting by Manjul Paul; Polling by Mumal Rathore; Editing by Rahul Karunakar and Hugh Lawson)

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RELEASE: 10 Recommendations That Will Improve Maine's Economy and Democracy – Center For American Progress

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RELEASE: 10 Recommendations That Will Improve Maine’s Economy and Democracy – Center for American Progress


Washington, D.C. — In Maine, more than 12 percent of residents live below the poverty line, and more than 1 in 3 families do not earn enough to pay for basic expenses. A new report from the Center for American Progress explains how strengthening worker power is key to reducing poverty and economic inequality in the state and how it would help to raise wages, close racial and gender pay gaps, and make the state’s democracy more responsive to the public.

While there are many steps the state could take to address these issues—including improving workplace health and safety standards, enforcing anti-discrimination rules, and reducing the influence of money in politics—ensuring that workers have a collective voice is crucial. Union membership in Maine has plummeted over the past 50 years. Today, only 5.5 percent of private sector workers belong to a union, despite the fact that research shows that unions help Mainers earn higher wages and benefits. Declining union membership has been accompanied by rising income equality in the state.

The report provides a blueprint for Maine policymakers to build worker power in their state, including these 10 policy recommendations:

  1. Provide workers a voice in setting and enforcing public health standards.
  2. Ensure that government spending creates good jobs.
  3. Improve workforce training by more fully involving worker organizations.
  4. Create workers’ boards to provide workers a voice in determining minimum industrywide pay and benefits.
  5. Partner with worker organizations and provide workers with a private right to action to ensure that workplace standards are enforced.
  6. Involve worker organizations in unemployment insurance modernization.
  7. Strengthen public sector unions.
  8. Use business permitting and licensing standards to support high-road businesses.
  9. Close loopholes that allow employers to skirt legal responsibilities and undermine worker power.
  10. Implement broad anti-retaliation protections.

“The COVID-19 crisis has exacerbated inequalities and shone a light on unsafe conditions in many Maine workplaces,” said David Madland, senior fellow at CAP and co-author of the report. “Weak worker protections and low rates of union membership have made it harder for workers to speak out and ensure that they are compensated fairly for their work. State policymakers can ensure a safer and more equitable economy for all Mainers by enacting reforms that strengthen workers’ voices on the job and in the economy.”

Read the report: “Strategies To Build Worker Power in Maine: 10 Recommendations That Will Improve Maine’s Economy and Democracy” by David Madland and Malkie Wall

For more information or to speak with an expert, contact Julia Cusick at .


The Center for American Progress is an independent nonpartisan
policy institute that is dedicated to improving the lives of all
Americans, through bold, progressive ideas, as well as strong
leadership and concerted action. Our aim is not just to change
the conversation, but to change the country.

© 2021 – Center for American Progress

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Biden's rescue plan will give U.S. economy significant boost: Reuters poll – The Telegram

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By Indradip Ghosh and Richa Rebello

BENGALURU (Reuters) – U.S. President Joe Biden’s proposed fiscal package will boost the coronavirus-hit economy significantly, according to a majority of economists in a Reuters poll, and they expect it to return to its pre-COVID-19 size within a year.

Biden has outlined a $1.9 trillion stimulus package proposal to jump-start the world’s largest economy, which has been at the epicenter of the COVID-19 pandemic having lost over 400,000 lives, fueling optimism and sending Wall Street stocks to record highs on Thursday.

Hopes for an upswing in U.S. economic growth, helped by the huge stimulus plan, was reflected in the Jan. 19-22 Reuters poll of more 100 economists.

In response to an additional question, over 90%, or 42 of 46 economists, said the planned fiscal stimulus would boost the economy significantly.

“There are crosswinds to begin 2021 as fiscal stimulus helps to offset the virus and targeted lockdowns. The vaccine rollout will neutralize the latter over the course of the year,” said Michelle Meyer, U.S. economist at Bank of America Securities.

“And upside risks to our…growth forecast are building if the Democrat-controlled government can pass additional stimulus. The high level of virus cases is extremely disheartening but the more that the virus weighs on growth, the more likely that stimulus will be passed.”

For a Reuters poll graphic on the U.S. economic outlook:

https://fingfx.thomsonreuters.com/gfx/polling/oakveynqovr/Reuters%20Poll%20-%20U.S.%20economy%20outlook.png

The U.S. economy, which recovered at an annualized pace of 33.4% in the third quarter last year from a record slump of 31.4% in the second, grew 4.4% in the final three months of the year, the poll suggested.

Growth was expected to slow to 2.3% in the current quarter – marking the weakest prediction for the period since a poll in February 2020 – amid renewed restrictions.

But it was then expected to accelerate to 4.3%, 5.1%, 4.0% in the subsequent three quarters, a solid upgrade from 3.8%, 3.9% and 3.4% predicted for those periods last month.

On an annual basis, the economy – after likely contracting 3.5% last year – was expected to grow 4.0% this year and 3.3% in 2022, an upgrade from last month.

For a graphic on Reuters Poll – U.S. economy and Fed monetary policy – January 2021:

https://fingfx.thomsonreuters.com/gfx/polling/azgpoljbkvd/U.S.%20economy.PNG

Nearly 90%, or 49 of 56 economists, who expressed a view said that the U.S. economy would reach its pre-COVID-19 levels within a year, including 16 who expected it to do so within six months.

“Even without the stimulus package, we had already thought the economy would get back to pre-COVID levels by the middle of this year,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets.

“With the new stimulus package there will be more direct money in people’s pockets, easily boosting the economy, provided a vaccine rollout progresses in a constructive manner.”

But unemployment was not predicted to fall below its pre-pandemic levels of around 3.5% until 2024 at least.

When asked what was more likely for inflation this year, only one said it would ease. The other 40 economists were almost evenly split between “a significant pickup” and price pressures remaining “about the same as last year.”

Still, the core Personal Consumption Expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – was forecast to average below the target of 2% on an annual basis until 2024 at least, prompting the central bank to keep interest rates unchanged near zero over the forecast horizon.

“I don’t think it will be an increase in underlying (inflation) trend, it is sort of a rebound in prices that have been depressed during the pandemic,” said Scott Brown, chief economist at Raymond James.

(For other stories from the Reuters global long-term economic outlook polls package:)

(Reporting by Indradip Ghosh and Richa Rebello; Additional reporting by Manjul Paul; Polling by Mumal Rathore; Editing by Rahul Karunakar and Hugh Lawson)

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