New estimates show US economy was in slightly better shape in Q3 - Al Jazeera English | Canada News Media
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New estimates show US economy was in slightly better shape in Q3 – Al Jazeera English

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Revised figures show the economy grew at a slightly faster pace in Q3, but Omicron is expected to weigh in on Q4.

The United States economy grew at a slightly faster pace in the three months ending September than originally thought, revised government figures released on Wednesday show.

Real gross domestic product (GDP), which measures the nation’s total output of goods and services, increased at a 2.3 percent annualised rate in the third quarter, said the Commerce Department.

While that was a slight improvement over the previous estimate of 2.1 percent, it still marked the slowest pace since the second quarter of 2020, when the US economy suffered an historic contraction as lockdowns ground activity to a halt.

The economy grew at a brisk 6.3 percent annualised rate in the first quarter of this year and 6.7 percent in the second quarter, as COVID-19 restrictions were rolled back. But the spread of the Delta variant of the coronavirus during the summer changed down the recovery in the third quarter.

Wednesday’s stronger read on third-quarter GDP was driven by upward revisions to consumer spending – the engine of the US economy – and business inventories. And some analysts see growth rebounding strongly in the final three months of this year.

“The recovery will end 2021 on a strong note, with strong household finances, rising employment, and an improved health backdrop [before Omicron arrived] supporting GDP growth above 7 percent in Q4,” said Oren Klachkin, lead US economist at Oxford Economics.

But Klatchin and other economists see the emergence of the highly contagious Omicron variant dampening economic prospects for the start of 2022.

Worries over Omicron have sent Wall Street on a rollercoaster ride in recent weeks. The outlook for the US economy also took a knock after moderate Democrat Senator Joe Manchin said over the weekend that he would not back President Joe Biden’s $1.75 trillion domestic investment bill known as Build Back Better.

That led Goldman Sachs on Sunday to trim its GDP growth forecast for the first quarter of 2022 to 2 percent from 3 percent. It also revised downward its forecasts for the second and third quarters of next year.

The economy has stayed on the path of recovery throughout this year, and the US labour market is awash in a near-record number of job openings.

But pandemic disruptions have seen costs soar, with annual consumer price inflation growing at its fastest pace in nearly 40 years last month. The healthy recovery combined with persistent price pressures has prompted the Federal Reserve to start reining in pandemic-era support that helped prop up the American economy.

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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