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Mnuchin says he is ‘not trying to hinder’ incoming administration – Al Jazeera English

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United States Treasury Secretary Steven Mnuchin has denied that he is attempting to limit the choices President-elect Joe Biden will have to promote economic recovery by ending several emergency loan programmes being run by the Federal Reserve.

Mnuchin said his decision was based on the fact that the programmes were not being heavily utilised. He said on Friday that Congress could make better use of the money by reallocating it to support grants to small businesses and extended unemployment assistance.

“We’re not trying to hinder anything,” Mnuchin said in a CNBC news interview. “We don’t need this money to buy corporate bonds. We need this money to go help small businesses that are still closed.”

However, critics saw politics at play in Mnuchin’s decision, saying the action would deprive the incoming administration of critical support the Fed might need to prop up the economy as coronavirus infections spike nationwide.

“There can be no doubt, the Trump administration and their congressional toadies are actively trying to tank the US economy,” Senator Sherrod Brown, D-Ohio, said in a prepared statement on Friday. “For months, they have refused to take the steps necessary to support workers, small businesses and restaurants. As the result, the only tool at our disposal has been these facilities.”

Mnuchin had on Thursday written to Federal Reserve Chairman Jerome Powell announcing his decision not to extend some of the Fed’s emergency loan programmes, which had been operating with support from the Treasury Department. The decision will end the Fed’s corporate credit, municipal lending and Main Street Lending programmes as of December 31.

The decision drew a rare rebuke from the Fed, which said in a brief statement on Thursday that the central bank “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy”.

The US Chamber of Commerce also criticised the move. “A surprise termination of the Federal Reserve’s emergency liquidity program, including the Main Street Lending Program, prematurely and unnecessarily ties the hands of the incoming administration and closes the door on important liquidity options for businesses at a time when they need them most,” said Neil Bradley, the chamber’s executive vice president, in a prepared statement.

Private economists argued that Mnuchin’s decision to end five of the emergency loan facilities represents an economic risk.

“While the backstop measure have been little used so far, the deteriorating health and economic backdrop could shine a bright light on the Fed’s diminished recession-fighting arsenal and prompt an adverse market reaction,” said Gregory Daco, chief US economist at Oxford Economics.

People wearing protective face masks wait in line outside a CityMD Urgent Care in the Bronx, New York, United States [File: Shannon Stapleton/Reuters]

Under the law, the loan facilities required the support of the Treasury Department, which serves as a backstop for the initial losses the programmes might incur.

In his letter to Powell, Mnuchin said he is requesting that the Fed return to Treasury the unused funds appropriated by Congress.

He said this would allow Congress to reappropriate $455bn to other coronavirus programmes. Republicans and Democrats have been deadlocked for months on approval of another round of coronavirus support measures.

In public remarks on Tuesday, Powell made clear that he hoped that the loan programmes would remain in effect for the foreseeable future.

“When the right time comes, and I don’t think that time is yet, or very soon, we’ll put those tools away,” he said in an online discussion with a San Francisco business group.

The future of the Main Street and Municipal Lending programmes has taken on greater importance with Biden’s victory. Many progressive economists have argued that a Democratic-led Treasury could support the Fed taking on more risk and making more loans to small and mid-sized businesses and cash-strapped cities under these programmes. That would provide at least one avenue for the Biden administration to provide stimulus without going through Congress.

Neither programme has lived up to its potential so far, with the Municipal Lending programme making just one loan, while the Main Street programme has made loans totalling nearly $4bn to about 400 companies.

Republicans including Senate Banking Committee Chairman Mike Crapo of Idaho and Senator Pat Toomey of Pennsylvania supported Mnuchin’s move.

“Congress’ intent was clear: These facilities were to be temporary, to provide liquidity and to cease operations by the end of 2020,” Toomey said in a statement. ”With liquidity restored, they should expire, as Congress intended and the law requires, by December 31, 2020.”

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Canada adds 62000 jobs in November; unemployment rate falls to 8.5 per cent – The Globe and Mail

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The Canadian labour market continues to defy expectations – at least for now.

Employment rose by 62,100 in November and the unemployment rate declined to 8.5 per cent from October’s 8.9 per cent, Statistics Canada said Friday. The gain was propelled by full-time work, which saw an increase of nearly 100,000 positions. All told, the labour market has recovered about 80 per cent of the three-million jobs that were lost in March and April.

November’s job gain was the weakest since the recovery began in May. However, it was also better than expected. The median estimate from economists was for a gain of 20,000 positions, with several calling for a decline due to tighter COVID-19 restrictions.

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A decline may simply be postponed. Statscan’s report pertained to work conditions between Nov. 8 and 14, thereby missing further tightening of restrictions in some parts of the country, such as Toronto and nearby Peel Region.

“As a result, it’s likely that Covid will catch up with the Canadian economy in the December data, with a decline expected in both employment and overall economic activity,” said Royce Mendes, senior economist at CIBC Capital Markets, in a note to clients.

The November report showed various cracks in the labour market. For one, Manitoba lost around 18,000 jobs. Before Statscan’s survey period, the province had imposed tighter public-health measures – including a ban on in-person shopping of non-essential goods – in a bid to curb rapidly worsening infections. Most of those affected last month were working part-time hours, Statscan noted.

At a national level, the information, culture and recreation industry lost 26,000 positions. Accommodation and food services fell by 24,000 jobs for its second consecutive monthly decline. About one-quarter of people on temporary layoff last month were in the hospitality industry. It’s almost assured that more pain is coming as restaurants are targeted by restrictions and bookings fall dramatically.

There were, however, several encouraging signs in November’s report. With its latest gain, the finance, insurance and real-estate industry is back to prepandemic levels of employment. Construction had a banner month, adding 26,000 positions – the first increase since July, driven largely by Ontario.

Furthermore, all Atlantic provinces enjoyed job growth. New Brunswick, Newfoundland and Labrador and Nova Scotia are all back to pre-crisis levels of employment.

The second wave of COVID-19 continues to disrupt work. There were 4.6 million Canadians who worked from home in November, among those who worked at least half their usual hours. That was an increase of roughly 250,000 from October.

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Canada added 62,000 jobs in November, slowest month of recovery since COVID-19 – CBC.ca

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Canada’s economy added 62,000 jobs last month, which is better than economists had been expecting, but it’s also the lowest total since the labour market recovery from COVID-19 began in May.

Statistics Canada reported Friday that the jobless rate ticked down four basis points to 8.5 per cent. That’s down from a peak of 13.7 per cent in May, but still well above the 5.6 per cent rate seen in February, before the pandemic.

Canada lost more than a million jobs in March and another two million in April, before the job market started to recover in May. According to Statscan, more than 19.1 million Canadians aged 15 or over had some sort of job in February. Last month, that figure stood at just over 18.6 million.

There are currently 1.7 million people in Canada officially categorized as unemployed, which means they would like to work but can’t find any. Roughly one quarter of them — 443,000 people — have been out of work for more than half a year.

Manitoba lost 18,000 jobs last month, while Ontario added 36,000 and Quebec 15,000. British Columbia added 23,000 and the Atlantic provinces added a total of 17,000.

Mostly full time

While the overall rate of job gains is undeniably slowing, economist Royce Mendes with CIBC did see some reason for optimism in the numbers, specifically the fact that most of the new jobs were full time, which boosted the total number of hours worked by 1.2 per cent — faster than the increase seen a month earlier.

But with cases spiking across Canada and more regions locking down more parts of the economy, he thinks the streak of job gains will come to an end this month. 

“It’s likely that COVID will catch up with the Canadian economy in the December data, with a decline expected in both employment and overall economic activity,” Mendes said.

Leah Nord with the Canadian Chamber of Commerce said the job slowdown shows that the government needs to do a better jobs of testing for COVID-19 and tracing contacts, and making much broader use of rapid testing to ensure businesses stay open for the long Canadian winter ahead.

“The short-lived partial rebound in jobs is turning an unfortunate corner heading into a potentially protracted second wave,” she said. “As we look forward, we believe there is increasing risk for a steady decline in employment over the coming months as governments and health authorities grapple with transmission mitigation.”

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Canadian economy added 62,000 jobs in November, unemployment rate fell to 8.5% – CityNews Toronto

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The rate of job growth continued to slow in November with the economy adding 62,000 jobs, down from 84,000 in October.

The gains were mostly focused in full-time work with a gain of 99,000 jobs, offset somewhat by a decline in part-time work of 37,000 positions, Statistics Canada reported Friday.

The average economist estimate had been for a gain of 20,000 jobs and an unchanged unemployment rate, according to financial data firm Refinitiv.

The gains in November left the country 574,000 jobs short of recouping the approximately three million jobs lost from lockdowns in March and April that sent the unemployment rate skyrocketing to 13.7 per cent in May.

The unemployment rate fell to 8.5 per cent compared with 8.9 per cent in October.

The unemployment rate would have been 10.9 per cent in November, StatCan said, had it included in calculations Canadians who wanted to work last month but didn’t search for a job.

The agency said 1.5 million people searched for jobs in November, a small drop of 39,000 from October, but still more than 448,000 or so who were looking for work in February, pre-pandemic.

The report noted that job searchers made up an increasing share of the total number of unemployed.

The youth unemployment rate fell 1.4 per cent to 17.4 per cent with a gain of about 20,000 jobs for the age group, mostly concentrated among young men with little change to the employment situation for women age 15 to 24.

Similarly, employment among women 25 to 54 years old didn’t change much in November after six straight months of seeing their numbers rise.

Positions in the hard-hit accommodation and food services sector declined for the second consecutive month, shedding 24,000 jobs in November.

That figure doesn’t take into account renewed restrictions in areas like Toronto that kicked in later in the month.

“As a result, it’s likely that COVID will catch up with the Canadian economy in the December data, with a decline expected in both employment and overall economic activity,” notes CIBC senior economist Royce Mendes.

Overall, the pace of job gains has slowed, with employment rising by 0.3 per cent in November compared to an average of 2.7 per cent per month between May and September.

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