Economy

When will Americans stop worrying and learn to love the U.S. economy?

Published

11 months ago

October 27, 2023

What will it take for Americans to stop worrying and finally learn to love the U.S. economy?

On paper, at least, the U.S. economy looks remarkably good. The recent stunning jobs report has now been followed by a stunning GDP report: U.S. economic output grew at an annual pace of 4.9 percent in the third quarter of this year, the Commerce Department reported Thursday, after adjusting for inflation and the usual seasonal patterns.

For context, that’s more than double the pace from the prior quarter, the fastest rate of growth since late 2021, and light-years higher than economists had been expecting not too long ago.

When this year began, a majority of private-sector economists surveyed were predicting an imminent downturn. Heck, even as recently as June, the staff economists at the Federal Reserve were predicting a “mild recession” that would begin sometime in 2023. These economists are not right-wing partisans trying to make President Biden look bad, or naive normies brainwashed by a pessimistic media, whatever Democrats’ fever dreams might be. They’re professional forecasters paid to get the numbers right.

Those doomer forecasts have since been scratched out in any case. Needless to say, 4.9 percent annualized growth is nowhere near standard recessionary territory, when the GDP is instead often shrinking.

Follow this authorCatherine Rampell‘s opinions

Remarkably, the U.S. economy is not only exceeding those pessimistic forecasts from a few months ago — it’s also exceeding forecasts made even before the pandemic began, based on predictions published in January 2020 by both the Congressional Budget Office and the International Monetary Fund for where we’d be around now.

This is not true for other countries. In most of the world, economies are still doing worse today than pre-pandemic forecasts estimated. Which kinda makes sense, given the huge hole that an unforeseen global health crisis blew in every economy.

Gangbusters growth wasn’t the only good news in Thursday’s Commerce report.

For the first time since late 2020, the Federal Reserve’s preferred measure of inflation is back down to a number that starts with a 2 (specifically, 2.4 percent). Why is this significant? The Fed’s target inflation rate is 2 percent. We’re now within spitting distance of achieving it, hopefully without the recession that has historically accompanied a drawdown in high inflation.

This is one quarter’s worth of data — the numbers can be noisy, and they’ll be revised multiple times before Commerce settles on a final figure. So, as always, don’t read too much into one report alone, especially since some other risks loom on the horizon (wars, a possible government shutdown, tightening financial conditions, etc.). Few economists expect the coming year’s growth to be as red-hot as last quarter’s.

That said, other economic indicators lately look solid, too, including data on rising wages.

This all raises two questions. First, why are the numbers so much stronger than professional forecasters had expected? And second, why don’t Americans seem to believe them?

No one (including yours truly) knows the answer to either of these questions for sure. But the ambivalent consumer appears to be key to both.

Consumer spending has lately been defying gravity. Despite inflation, and despite rising interest rates that make all kinds of purchases more expensive, consumers continue to keep their wallets open. Maybe they got into the habit of spending more money; maybe they feel pressured to keep up with the Joneses; maybe they’re feeling more flush than they let on.

Whatever the case, they’re still spending — and they’re a central reason that economic growth has been unexpectedly resilient.

Meanwhile, consumers’ stated outlook on the economy is completely at odds with their spending behavior. In fact, according to the University of Michigan consumer sentiment index, Americans are about as negative about the U.S. economy today as they were during stretches of the Great Recession. As a reminder, the economy was in a very bad place then: The foreclosure crisis was still rippling through the economy, and unemployment was hovering around 9 percent, more than double what it’s been lately.

On nearly every metric, the economy looks better today than it did then — and yet consumers still hate this economy about as much. The one outlier measure, of course, is inflation. Even though it has slowed quite a bit lately, people are clearly still furious about the price growth they’ve already endured. Maybe this isn’t so surprising. Historical research from developed countries suggests that few things make the public angrier than an unexpected burst of inflation.

Plus, as poor as Biden’s polling (especially on the economy) has been, note that leaders in other countries that are enduring high inflation are mostly polling worse than he is.

There are also signs of strain among U.S. consumers, despite their continued spending. Credit card and auto loan delinquency rates are rising, for instance. So it’s not as if all is hunky-dory, or the threat of recession has completed disappeared.

However unhappy you might be with the economy now, though, it’s worth remembering one thing: It could be so much worse.

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Economy

Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

Published

3 hours ago

September 18, 2024

Anne Joseph

VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

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Economy

N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

Published

3 hours ago

September 18, 2024

Anne Joseph

FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

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Economy

Canadian Coast Guard crew member lost at sea off Newfoundland

Published

3 hours ago

September 18, 2024

Anne Joseph

ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

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