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Nova Scotia economy stays strong as international migration declines – The Journal Pioneer

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Admissions of permanent residents into Nova Scotia dropped by over half last year, mirroring a national decrease in immigration. This is the first decline the province has had after three years of steady growth in immigration.

Government data updated last week shows that Nova Scotia added 3,505 permanent residents in 2020, a decrease of 4,075 from 7,580 admissions in the previous year. Similarly, immigration to Canada dropped by almost half, from 341,175 in 2019 to 184,370 in 2020.

“In the light of the current pandemic, it is something that was expected to happen,” said Ather Akbrari, a Saint Mary’s University economics professor.

Visa applications have been delayed across Canada since the pandemic started. The longer wait time for immigrants to renew or receive their first permanent residence card has left many in distress.

Although a sharp fall in immigration could have implications for the housing market and employment rate, Akbari said the public should focus on the positive side.

“So the first thing that we should remember is that the Nova Scotia economy has been doing well, even during the pandemic,” said Akbrari.

According to a recent labour force survey in January, Nova Scotia is one of the four provinces that had an increase in employment with a 1.7 per cent monthly rise. The only other Atlantic province that had a growth in labour force is P.E.I. The unemployment rate in Nova Scotia also dropped to 8.3 per cent, one point below the national average of 9.4 per cent.

Akbari said the labour force and real estate are performing strongly mainly because of the higher interprovincial migration.

“It’s not a gloomy picture for the province. Because of the low incidence rate, people are considering moving in from other provinces to here. And the real estate demand is high,” said Akbari.

The government data showed the province had a net gain of 1,471 for the third quarter of 2020, the highest the province has seen since the third quarter of 1984. However, the gain was not enough to offset losses in international migration, so the population decreased.

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US adds a strong 379,000 jobs in hopeful sign for economy – Investment Executive

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The pickup in hiring lowered the unemployment rate from 6.3% to 6.2%, the Labor Department said Friday in its monthly jobs report. That is down dramatically from the 14.8% jobless rate of April of last year, just after the virus erupted in the United States. But it’s well above the pre-pandemic unemployment rate of 3.5%.

Stock prices surged on the news of solid job growth, a day after Wall Street suffered deep losses on fears that inflation and interest rates could soon be headed higher.

One year after the pandemic triggered a violent recession, economists are increasingly optimistic that hiring will accelerate in the coming months as Americans seize the opportunity to once again travel, shop, attend sporting events and visit movie theatres and restaurants. Households as a whole have accumulated a huge pile of savings after having slashed spending on those services. Much of that money is expected to be spent once most people feel comfortable about going out.

Friday’s report showed that the nation’s job growth is still being driven by a steady recovery of bars, restaurants and other leisure and hospitality establishments. Bars and restaurants, in particular, snapped back last month, adding 286,000 jobs as business restrictions eased in California and other states. That trend will likely continue as Texas this week joined some other states in announcing that it would fully reopen its economy with no restrictions.

Also hiring last month were retailers, which added 41,000 jobs, health care companies with 46,000 and manufacturers with 21,000. On the other hand, construction companies shed 61,000 jobs, likely in part because of the severe storms and power outages in Texas.

Friday’s strong jobs report, by suggesting that the economy is on the mend, could complicate President Joe Biden’s push for his $1.9 trillion economic rescue package, which is being considered by the Senate after winning approval in the House. The Biden package would provide, among other things, $1,400 checks to most adults, an additional $400 in weekly unemployment aid and another round of aid to small businesses.

One discouraging note in the February data is that last month’s net job growth came entirely from people who reported that their layoffs had been temporary. By contrast, the number of people who said their jobs were permanently gone was largely unchanged compared with January. People who have permanently lost jobs typically face a tougher time finding new work. In many cases, their former employers have gone out of business.

With so much money being pumped into the economy, Oxford Economics forecasts that growth will reach 7% for all of 2021, which would be the fastest calendar-year expansion since 1984. The Congressional Budget Office projects that the nation will add a substantial 6.2 million jobs this year, though that wouldn’t be nearly enough to restore employment to pre-pandemic levels.

Still, the size of the Biden relief package, coming as the economy is already showing improvement, has stoked fears that growth could overheat and accelerate inflation, sending borrowing costs up and possibly leading the Federal Reserve to jack up interest rates. Those fears have roiled financial markets for the past two weeks.

Fed Chair Jerome Powell sought to assuage those concerns on Thursday — without success, based on sharp selloffs in the stock and bond markets — when he suggested that any meaningful rise in inflation would likely prove temporary and that the Fed would be in no hurry to raise its benchmark short-term rate.

Nor did Powell offer any hint that the Fed would act to push back against a surge in the yield on the 10-year Treasury note, which has jumped from about 0.9% last year to 1.5% late Thursday. Still, Powell sounded some optimistic notes. Citing in part the increasing distribution and administering of coronavirus vaccines, he said, “There’s good reason to expect job creation to pick up in the coming months.”

Other recent economic reports have also suggested better times ahead. Americans sharply increased their spending at retail stores and restaurants in January, when the $600 relief checks were mostly distributed. Retail sales jumped 5.3%, after three months of declines.

Factory output also picked up that month, and demand for long-lasting goods, such as autos and aircraft, rose 3.4%, the government said last week.

Home sales have been on a tear for most of the past year, driven by low mortgage rates and the desire of many Americans for more space during the pandemic. A huge jump in the proportion of people working from home has also driven up sales, which were nearly 24% higher in January than a year earlier.

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Canada’s Ivey PMI climbs to six-month high as employment improves

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https://www.pmi.org

TORONTO (Reuters) – Canadian economic activity grew in February at the fastest pace in six months as employment picked up, Ivey Purchasing Managers Index (PMI) data showed on Friday.

The seasonally adjusted index rose to 60.0 from 48.4 in January, its highest since August and the first time in three months it was above the 50 threshold indicating an increase in activity.

The Ivey PMI measures the month-to-month variation in economic activity as indicated by a panel of purchasing managers in the public and private sectors from across Canada.

Canada has grappled with a harsh second wave of infections in recent months, with populous Ontario and Quebec both imposing strict restrictions in December and January to contain the spread. Those are now being loosened.

The gauge of employment rose to a four-month high at an adjusted 54.0 from 41.5 in January, while the inventories index was at 57.8, up from 56.7.

Statistics Canada is due to release the February employment report next Friday.

The unadjusted PMI rose to 63.1 from 55.7.

 

(Reporting by Fergal Smith; Editing by Chizu Nomiyama)

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The economy added 379,000 jobs in February as unemployment dropped slightly – The Washington Post

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The U.S. economy added 379,000 jobs in February, a level well above the pre-pandemic rate that surpassed analysts’ estimates and bolstered hopes for more positive growth through the year as the public health crisis lessens.

The unemployment rate dropped a tenth of a percentage point to 6.2 percent.

It was the most positive jobs report since October, following two months of disappointing numbers, including the loss of an estimated 306,000 jobs in December. And it comes in the midst of final negotiations over President Biden’s $1.9 trillion stimulus package, which is being debated in the Senate amid Washington’s intensely polarized climate.

But economists said that while better than expected, the jobs report showed just how much work remains for the Biden administration and lawmakers around the country as the economy continues to climb out of the employment deficit left by the pandemic.

“Obviously it’s great that job gains beat expectations and they are faster than pre-covid average monthly gain,” said Julia Pollak, a labor economist at ZipRecruiter. “That being said, we’re still in a very very deep hole, and these are not the numbers you would hope to see in a robust recovery.”

Job growth would need to pick up significantly to regain the approximately 9.5 million jobs lost since last year. When estimates for how much the labor market would have grown in the previous economy are included, that hole is even larger, as many as 12 million jobs, according to some economists.

White House officials said the report underscored the need for the stimulus package, with Chief of Staff Ron Klain noting that at the current pace, it would take the economy until April 2023 to get back to the employment levels it had in February 2020.

“The rescue plan is absolutely essential to turning this around, getting kids back to school safely, giving a lifeline to small businesses and getting the upper hand in COVID,” President Biden said Friday, noting that some 400,000 small businesses have shuttered during the pandemic. “All those empty storefronts are not just shattered dreams, they are warning lights going off in state and local budgets.”

The gains in February were driven by large increases in the leisure and hospitality sector, which added 355,000 jobs, as coronavirus-related restrictions eased over the course of the month in many jurisdictions.

Of these jobs, about 286,000 came from restaurants, bars and other food service establishments. RSM chief economist Joseph Brusuelas noted that leisure and hospitality netted only 22,000 jobs when the gains were stacked up against losses from the previous months amid closures and surging coronavirus cases.

And employment in the sector still badly lags behind its pre-pandemic level: There are 3.5 million fewer jobs in the industry than there were one year ago.

Other sectors gaining jobs included temporary help services, which added 53,000 jobs, health care and social assistance, which added 46,000 positions, and retail, which added 41,000 jobs.

Clothing stores suffered, losing 20,000 jobs. Manufacturing ticked up by 21,000, while construction fell by 61,000, a decline that was probably driven in part by severe winter weather, the Bureau of Labor Statistics noted.

Government workers were hit hard, losing 37,000 jobs at the local level and 32,000 education workers at the state level, data that some said reflected the need for more aid to help shore up budget shortfalls related to the pandemic.

“We believe that it’s a direct result of the fact that we were unable to get aid to states and cities and towns and schools,” said Lee Saunders, president of the American Federation of State, County and Municipal Employees. “That’s why we’re continuing to fight and hopefully we get some money moving to those entities when the Senate acts. Its unconscionable that we’re seeing these layoffs.”

The $1.9 trillion aid package passed by the House includes $350 billion for state and local governments, an issue that faced major opposition from congressional Republicans during the last round of stimulus negotiations despite enjoying support from some state and local GOP officials.

Daniel Zhao, senior economist at Glassdoor, noted that the job growth in industries like leisure and hospitality was probably more about those sectors recovering from job loss in December and January, and less about regaining jobs lost earlier last year.

“Today’s report is showing green shoots of the recovery poking out of the snow,” said Zhao. “But the growth is a little bit weaker than headline numbers imply. … It’s good that these businesses are recalling workers, but it points more to the fact that these businesses are crawling out of the hole from December, rather than the hole that opened up in April and May. It doesn’t necessarily look like incremental growth.”

Drew Matus, an economist and chief market strategist at MetLife Investment Management, said he was concerned that the average hours worked for all workers declined by about 18 minutes a week — hundreds of thousands of jobs’ worth of hours when multiplied by the entire working population.

“The scale of the decline is quite big,” he said. “This report tells me things are looking up if vaccine administration continues, but we’re still not out of the woods yet.”

Still, there are increasingly optimistic signs about the economy and the public health crisis that delivered such a shocking blow to it last year.

The rate of vaccinations is picking up across the country, with improved forecasts about the supply that will be available before June. Coronavirus cases, hospitalizations and deaths have come down significantly from their peak in January, though concerns remain about another upswing as new variants circulate and exhaustion grows after what will soon be more than a year’s worth of preventive measures.

According to Census Bureau data, the share of businesses reporting a “large negative effect” from the pandemic reached its lowest level in the last two weeks of February, just under 30 percent, as did the percentage of businesses reporting that they had cut staff.

The share of businesses saying they added employees in February, about 5.5 percent, was almost double the rate over the last two reports, from the end of December into January.

Many economists are expecting the labor market to make much bigger gains once more aid is authorized in Washington and vaccinations reach a broader slice of the public.

“The report will neither persuade the Federal Reserve to alter its path of accommodative monetary policy, nor should it be used as an argument to pull back on the Biden administration’s proposal for $1.9 trillion in fiscal stimulus,” said Brusuelas, the RSM economist. “For now, the composition of hiring and unemployment suggests that we have yet to get past the deep freeze in the economy caused by the pandemic.”

The report covers the first full month of the Biden presidency. Overall, the economy still has 9.5 million fewer jobs than it did before the pandemic, and economists warn that the unemployment rate would be higher if not for more than 4 million people who have left the workforce over the past year. Women have left the labor force at a significantly higher rate than men: about 2.5 million women, compared with 1.5 million men.

Federal Reserve Chair Jerome H. Powell said last month that the real unemployment rate is probably closer to 10 percent.

Economists and public health experts are more optimistic about the coming months as the rate of vaccinations accelerates.

February saw decreasing caseloads and more reopenings for businesses like restaurants and bars in states like California and New York. But many industries, such as tourism and hospitality, now employ far fewer workers than they did before the pandemic.

Jeff Stein contributed to this report.

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