Americans’ outlook on the national economy has improved somewhat from its lowest points during the early weeks of the coronavirus pandemic, but a new poll suggests Democrats and Republicans are living in alternate economic realities amid the sharpest recession in the nation’s history.
Eighty-five percent of Democrats call economic conditions “poor,” while 65% of Republicans describe them as “good” in a new survey conducted by The Associated Press-NORC Center for Public Affairs Research.
This divide reflects the deep polarization ahead of the 2020 presidential election, as well as a series of indicators that point toward a weakened but recovering U.S. economy.
“The economy is in terrible shape and improving rapidly,” said Harvard University professor Jason Furman, formerly the top economist in the Obama White House. “Depending on which of the two halves you’re looking at, you’re going to have a very different interpretation of where we are.”
FILE – Diners are seated in an outdoor dining area on a sidewalk at Limey’s Pub, in Norwood, Mass., June 18, 2020.
Americans can see reasons for hope as well as doubt. They face a host of uncertainties about the path of COVID-19, the fate of small businesses with fewer customers and the status of additional government aid.
Overall, 63% of the country says the economy is in poor shape, down somewhat from the 70% who felt that way in May. The change was driven by increasingly optimistic Republicans, only 43% of whom described the economy as good a month ago. Two-thirds of Republicans, but just 29% of Democrats, expect improvement over the next year.
Thelma Ross, 78, of Granby, Missouri, believes the economy will recover if President Donald Trump can defeat Democratic challenger Joe Biden, the former vice president.
“I think it’s going to come back, stronger than ever, if we get the right president in,” Ross said. “President Trump is a businessman.”
Yet she is concerned by the protests after George Floyd, an African American, died in police custody in Minneapolis and the calls to remove statues that celebrate the Confederacy and Christopher Columbus. Ross views division as harmful for any economic recovery.
Ross said of Trump: “I pray for divine revelation and divine guidance for that man because he needs that right now.”
Job loss
The survey finds that African Americans and Hispanics are more likely than white Americans to say someone in their household has lost a job or other income. That inequality has added to the broader reckoning with structural racism amid nationwide protests over police brutality following Floyd’s death.
Overall, 66% of Hispanic Americans and 53% of black Americans say they’ve experienced some form of household income loss, including layoffs, unpaid time off and cuts in hours or pay. Forty-two percent of white Americans say the same. Thirty-four percent of Hispanics, 29% of African Americans and 20% of white Americans said someone in their household has been laid off.
The poll finds signs that some of those layoffs are becoming permanent. Among all those who experienced a layoff in their household, 55% say the job definitely or probably will return — and 8% say it already has. Still, 36% said the job will most likely not come back, which is significantly higher than the 20% who said that in April.
The economy cratered in March and April as people sheltered in place in hopes of stopping the pandemic, and the unemployment rate spiked to at least 14.7%. Responses to government surveys suggested the true jobless rate may have been even higher. But it showed signs of reviving in May. Retail sales surged 17.7%, and 2.5 million jobs were added. The unemployment rate improved to 13.3%, a number that is still the second highest reading in records going back to 1948.
Leah Avery, 54, lost her job driving a school bus in suburban Dallas. She said she checks her email daily to find out how schools will reopen. She applied for unemployment benefits a month ago, but the request has been under review.
“It’s a struggle day by day for us to pay our bills, and I know others are going through the same thing,” she said.
The job loss has only added to her stress. Her aunt died from COVID-19, and she needs to take care of her elderly mother and her husband, who has dialysis appointments three days a week. It’s a full-time job with no pay, she said.
“I just have these moments where it makes me cry,” she said. “You don’t know this day from the next day what is going to happen.”
Federal aid
The nearly $3 trillion in approved federal aid has shielded many people from the pain of the downturn. About two-thirds of Americans still call their personal financial situations good.
A bipartisan group of economists proposed an additional $1 trillion to $2 trillion of aid to sustain any recovery, including targeted funds for state and local governments, subsidized loans for small businesses, more generous unemployment benefits and aid for low-wage workers.
“It should be thought of as an investment in the economy,” said Melissa Kearney, a University of Maryland economics professor who helped lead the effort. The proposals are based on ideas shown to boost growth and provide traction for a recovery that is still in its early and fragile stages.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
