Statistics Canada says the economy saw its largest monthly drop on record in April as it came to a near standstill due to the pandemic, but early indications point to a rebound in May as businesses began to reopen.
The agency said Tuesday gross domestic product fell 11.6 per cent in April with non-essential businesses shut for the full month following a 7.5 per cent decline in March.
However, Statistics Canada said its initial flash estimate points to growth of three per cent in May. The estimate will be revised and finalized at the end of July.
Economists on average expect a drop of 13 per cent for April, according to financial markets data firm Refinitiv.
Manufacturing was down 22.5 per cent in April as many factories either shuttered or greatly reduced capacity in line with public health measures to slow the spread of COVID-19 — a move that hit the automotive sector hard as the output of motor vehicles plunged 97.7 per cent.
Even sectors that had increases in March weren’t spared in April like food manufacturing, which dropped 12.8 per cent in April as outbreaks at meat processing plants forced them to shut down.
The accommodation and food services sector dropped 42.4 per cent in April, as customers replaced eating out with staying in, hitting a sector that saw a 37.1 per cent decline in March.
Output from bars and restaurants in particular plunged 40.8 per cent as local and provincial states of emergency forced their closure, or limited operations to take-out and delivery.
Accommodation services fell 45.7 per cent, Statistics Canada says, owing to restrictions on travel between provincial and international borders.
And then there was sports.
As COVID-19 iced the National Hockey League season and put the National Basketball Association, Major League Baseball and Major League Soccer on the sidelines, the arts and entertainment sector declined 25.6 per cent, further affecting companies in the accommodation and food services sectors.
Down too was construction by 22.9 per cent, concentrated largely in Ontario and Quebec, while a similar decline was noted in retail trade as brick-and-mortar stores stayed closed and consumers spent less while staying at home.
Poring through the data, Statistics Canada noted a jump in output of 17.3 per cent from online shopping as households shifted their shopping habits.
The silver lining in the horrible April numbers may be that it marked the bottom of this short but extremely deep recession, CIBC chief economist Avery Shenfeld said.
In a note, he wrote that the flash estimate for May is roughly half of what was expected, but the rebound may be more robust in June with more economic reopenings taking place.
“But thereafter, repairing the rest of the March and April wreckage will be a slower process, as recent COVID-19 flare ups here and elsewhere are showing the hazards of moving too far ahead of the virus,” he wrote.
“Markets were expecting the April news, and we can’t tell if the flash estimate for May will be treated as a disappointment.”
This report by The Canadian Press was first published June 30, 2020.
Is Facebook losing the boycott battle? – BBC News
As an advertising boycott of Facebook continues to grow, Mark Zuckerberg shows no sign of backing down.
The campaign, involving some of the world’s biggest companies, calls on Facebook to do more about hate speech and misinformation.
Facebook boss Mr Zuckerberg says he thinks the brands will be back “soon enough” and that Facebook’s policies won’t change. It’s a story that cuts to the heart of how the internet interacts with democracy, freedom of speech, business and how we define truth and hate.
In the latest of his weekly reports, this is Ros Atkins on Facebook and the boycott.
Japan to US: Extradite men accused of helping ex-Nissan boss flee – Aljazeera.com
Japan has formally asked the United States to extradite a former Green Beret and his son, who are accused of helping former Nissan Motor Co boss Carlos Ghosn flee the country while he was awaiting trial on financial charges.
Japan submitted a request to the US Department of State to extradite Michael Taylor and his son, Peter Taylor, after they were provisionally arrested in Massachusetts in May, the US Department of Justice said in a court filing on Thursday.
Attorneys for the Taylors did not immediately respond to requests by Reuters for comment. Their lawyers have argued that they have not been charged in Japan with an offense for which extradition is possible under the US-Japan treaty.
The Japanese embassy in Washington and the Department of Justice did not respond to requests for comment.
The Taylors were arrested in Harvard, Massachusetts, on May 20 at Japan’s request after authorities there in January accused the pair of helping smuggle Ghosn, Nissan’s former chairman, out of the country on December 29, 2019, in a box.
Ghosn fled to Lebanon, his childhood home, after being charged with engaging in financial wrongdoing, including by understating his compensation in Nissan’s financial statements. He denies wrongdoing.
Lebanon has no extradition treaty with Japan.
Both men have been held without bail since their arrest. Prosecutors have argued that neither Taylor – including Michael, a US Army Special Forces veteran and private security specialist – should be released from jail as they are flight risks.
Reuters news agency
Crude Oil Price Forecast – Crude Oil Markets Continue With Same Song and Dance – FX Empire
WTI Crude Oil
The West Texas Intermediate Crude Oil market has gone back and forth during the trading session on Thursday, as we awaited the jobs figure. We tried to break out above the $40 level but failed a little bit, and the fact that the 200 day EMA is sitting just above at what was the previous top of a major gap, seems to be a bit too much for the market to continue this trajectory. We have gone sideways for a moment now, and that does seem to suggest that we are probably going to roll over, although I do not think it is a major selling event. At this point, the market is stuck between the 50 day and the 200 day EMA indicators.
Crude Oil Video 03.07.20
Brent markets tried to rally initially during the day but gave back the gains. It is very much the same over here as in the WTI market, we are simply trading in a general gap that causes both support and resistance. The market has nowhere to be, except in this grade of crude oil we have not filled the gap above, so that is something that is still relatively bullish. Because of this, I anticipate that Brent will outperform WTI, although I would also point out that is a relative strength call, not necessarily that I am overly bullish, just that it will do better than the other. At this point, I think we are simply looking for some type of catalyst to make the next move.
For a look at all of today’s economic events, check out our economic calendar.
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