Winter weather conditions may remain on the forecast for most of the country during the coming weeks, but from a U.S. economic perspective, it’s finally beginning to feel like spring. That may be due in part to changes that come from a new administration, shifting priorities, and fresh perspectives.
But this economic thaw is much more than just a financial uptick. It’s a confluence of several positive factors coming together at one time that’s driving greater optimism than we’ve seen in the last several difficult months. If these trends continue in the right direction, we may be in store for a vibrant springtime for the American economy.
Managing Covid-19 & Passing Economic Stimulus
In order to return to normalcy, getting the pandemic under control will be key. Bold and bipartisan action is essential to address the health and economic crises continuing to face the U.S.
First – we must, in a bipartisan way, do all we can to maximize the vaccination effort. This is essential to establishing any short-, medium- or long-term goals for our citizens and our economy.
Second – while politics always plays a role in determining the size and scope of stimulus packages, this iteration needs special consideration as the cause is very different from past financial crises. Parts of our economy are, in fact, hurting and need support, and we must also keep a focus on prudent fiscal and monetary policies that work together without causing significant future structural financial imbalances.
Supporting Small Businesses & Working Americans
An essential component of that stimulus will be supporting American small businesses, which still face an uphill battle in the coming months. The Paycheck Protection Program (PPP) played a critical role in supporting small businesses, allowing organizations like ours to assist small business owners in receiving the federal funding they needed to survive. The Treasury Department estimated PPP loans supported 51 million American jobs through the program’s close on August 8th, 2020. The launch of the second round of PPP – through which the Small Business Administration has already approved 1.3 million loans totaling over $100 billion – is another lifeline, and we are continuing to help those in need.
But according to the Federal Reserve, sales for nearly 90% of small businesses have not yet returned to pre-pandemic levels. As many as 64% would apply for another round of government aid if it were offered – and an astonishing 39% of that group expected they would be unlikely to remain in business without further assistance. Continued support will be essential to keep the lights on for those small businesses.
Rebuilding America’s Infrastructure
One bright spot on the horizon may be the restoration of America’s roads, bridges, mass transit and other infrastructure works. This effort will help build up our communities to 21st century standards and support local economies. The increase in electric vehicle use, for example, will require building hundreds of thousands of charging stations across the country. Collectively, these efforts could create millions of good-paying jobs and untold investment dollars, catalyzing serious economic activity.
I’m optimistic these efforts will be greatly beneficial for the U.S. economy going forward in 2021. With the number of available jobs on job-search site Indeed returning to pre-pandemic levels in January, hiring could begin to normalize in the coming weeks. As long as we are able to keep Americans safe and healthy as we continue to battle Covid-19 and ensure that pent-up demand and economic stimulus don’t negatively impact interest rates, we could expect to see the American economic engine blooming in the coming months.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
