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Stock market news live: Wall Street dives on coronavirus panic, stocks have worst day in 2 years – Yahoo Canada Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="World markets got slammed on Monday, with investors unnerved by rising coronavirus concerns. An unexpected surge in confirmed infections within Italy and South Korea — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic.” data-reactid=”15″>World markets got slammed on Monday, with investors unnerved by rising coronavirus concerns. An unexpected surge in confirmed infections within Italy and South Korea — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="4:15 p.m. ET: Shake Shack swoons after Q4 earnings” data-reactid=”17″>4:15 p.m. ET: Shake Shack swoons after Q4 earnings

FILE - In this April 15, 2015, file photo, a man walks out of a Shake Shack in front of the New York-New York hotel and casino in Las Vegas. Shake Shack reports financial results Wednesday, Aug. 10, 2016. (AP Photo/John Locher, File)

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FILE – In this April 15, 2015, file photo, a man walks out of a Shake Shack in front of the New York-New York hotel and casino in Las Vegas. Shake Shack reports financial results Wednesday, Aug. 10, 2016. (AP Photo/John Locher, File)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shake Shack’s fourth quarter earnings report is leaving investors hungry for more. The burger chain lost 6 cents per share and reported big jumps in quarterly revenue on relatively light sales, but its stock tumbled sharply in post-market trading after it gave guidance below Wall Street estimates.” data-reactid=”38″>Shake Shack’s fourth quarter earnings report is leaving investors hungry for more. The burger chain lost 6 cents per share and reported big jumps in quarterly revenue on relatively light sales, but its stock tumbled sharply in post-market trading after it gave guidance below Wall Street estimates.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shake Shack’s (SHAK) stock plunged by nearly 11% from Monday’s close at $73.57, but have rallied 24% since 2020 began.” data-reactid=”39″>Shake Shack’s (SHAK) stock plunged by nearly 11% from Monday’s close at $73.57, but have rallied 24% since 2020 began.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="4:00 p.m. ET: Stocks walloped by coronavirus outbreak” data-reactid=”41″>4:00 p.m. ET: Stocks walloped by coronavirus outbreak

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Wall Street suffered its worst losses in 2 years on Monday, as fears of a global coronavirus pandemic forced investors out of stocks and into safe-havens like the dollar, gold and Treasuries. All of the Dow’s (^DJI) gains for 2020 have evaporated amid the volatility, which is unlikely to abate after an eruption of new infections outside of China.” data-reactid=”46″>Wall Street suffered its worst losses in 2 years on Monday, as fears of a global coronavirus pandemic forced investors out of stocks and into safe-havens like the dollar, gold and Treasuries. All of the Dow’s (^DJI) gains for 2020 have evaporated amid the volatility, which is unlikely to abate after an eruption of new infections outside of China.

Here’s where markets settled at the close:

  • S&P 500 (^GSPC): -3.35%, or -111.86 points to 3,225.89

  • Dow (^DJI): -3.56%, or -1,031.40 points to 27,961.01

  • Nasdaq (^IXIC): -3.71%, or -355.31 points to 9,221.28

  • Crude oil (CL=F): -3.95% or -$2.11 to 51.27

  • Gold (GC=F): +0.73% or $12.00 to 1,660.80

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="3:23 p.m. ET: Key pharma stocks hit by opioid fears” data-reactid=”54″>3:23 p.m. ET: Key pharma stocks hit by opioid fears

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Monday has been a bad day for pharma giants ensnared in opioid legal action. Mallinckrodt (MNK) crumbled by a whopping 40% at its lows, after a Wall Street Journal report that the company may be preparing for the bankruptcy of its U.S. generics unit, which is in the crosshairs of opioid lawsuits. Separately, Teva (TEVA) — another opioid maker — dropped by over 4%, in part because of a “sell” recommendation by Edward Jones.” data-reactid=”55″>Monday has been a bad day for pharma giants ensnared in opioid legal action. Mallinckrodt (MNK) crumbled by a whopping 40% at its lows, after a Wall Street Journal report that the company may be preparing for the bankruptcy of its U.S. generics unit, which is in the crosshairs of opioid lawsuits. Separately, Teva (TEVA) — another opioid maker — dropped by over 4%, in part because of a “sell” recommendation by Edward Jones.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="1:15 p.m. ET: Pandemic jitters send Europe to its worst day in 3 years” data-reactid=”57″>1:15 p.m. ET: Pandemic jitters send Europe to its worst day in 3 years

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="European stocks suffered their worst day since 2016 on Monday as coronavirus infections climbed in Italy, the eurozone’s third-largest economy.” data-reactid=”58″>European stocks suffered their worst day since 2016 on Monday as coronavirus infections climbed in Italy, the eurozone’s third-largest economy.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The pan-European STOXX 600 index (^STOXX) closed down by almost 3.8%, with stocks on Italy’s FTSE MIB Index (FTSEMIB.MI) sinking by more than 5.4%. The FTSE 100 (^FTSE) declined by more than 3.3% in London. Germany’s DAX (^GDAXI)&nbsp;was down by 4%, while France’s CAC 40 (^FCHI)&nbsp;was down by more than 3.9%.” data-reactid=”59″>The pan-European STOXX 600 index (^STOXX) closed down by almost 3.8%, with stocks on Italy’s FTSE MIB Index (FTSEMIB.MI) sinking by more than 5.4%. The FTSE 100 (^FTSE) declined by more than 3.3% in London. Germany’s DAX (^GDAXI) was down by 4%, while France’s CAC 40 (^FCHI) was down by more than 3.9%.

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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Noon ET: Stocks take new leg lower; travel and leisure lead the rout” data-reactid=”61″>Noon ET: Stocks take new leg lower; travel and leisure lead the rout

United Airlnes and American Airlnes planes are shown on the tarmac from an outdoor terrace and observation deck at San Francisco International Airport in San Francisco, Thursday, Feb. 20, 2020. (AP Photo/Jeff Chiu)United Airlnes and American Airlnes planes are shown on the tarmac from an outdoor terrace and observation deck at San Francisco International Airport in San Francisco, Thursday, Feb. 20, 2020. (AP Photo/Jeff Chiu)

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United Airlnes and American Airlnes planes are shown on the tarmac from an outdoor terrace and observation deck at San Francisco International Airport in San Francisco, Thursday, Feb. 20, 2020. (AP Photo/Jeff Chiu)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="All of Wall Street’s major benchmarks are hunkered near session lows on coronavirus selling, with airlines and other leisure stocks bearing the brunt of selling. Some of the sector’s prominent names, like American Air (AAL), Norwegian Cruise (NCLH), Delta (DAL), Carnival (CCL), Royal Caribbean (RCL) and Booking.com, are off by at least 7% on the day. Travel and leisure has long been seen as most vulnerable to the pathogen (the Diamond Princess fiasco a prime illustration of why).” data-reactid=”82″>All of Wall Street’s major benchmarks are hunkered near session lows on coronavirus selling, with airlines and other leisure stocks bearing the brunt of selling. Some of the sector’s prominent names, like American Air (AAL), Norwegian Cruise (NCLH), Delta (DAL), Carnival (CCL), Royal Caribbean (RCL) and Booking.com, are off by at least 7% on the day. Travel and leisure has long been seen as most vulnerable to the pathogen (the Diamond Princess fiasco a prime illustration of why).

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:25 a.m. ET: Why Apple, tech stocks are sinking” data-reactid=”83″>11:25 a.m. ET: Why Apple, tech stocks are sinking

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For Apple (AAPL) and several other tech bellwethers, the heavy reliance on China (both from a demand and supply perspective) are an albatross as coronavirus fears crimp the global supply chain.” data-reactid=”84″>For Apple (AAPL) and several other tech bellwethers, the heavy reliance on China (both from a demand and supply perspective) are an albatross as coronavirus fears crimp the global supply chain.

In a note to clients on Monday, D.A. Davidson cited the iPhone maker as the biggest loser in the current environment. Analyst Tom Forte told Yahoo Finance in an interview that Grubhub and Netflix could benefit, as homebound citizens order in and binge on television.

The firm also listed the following as having “significant risk”:

In late morning trading, Apple dived by 4% to trade around $300 per share, while Facebook slumped by nearly 5%.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:00 a.m. ET: Stocks pull off troughs, still sharply lower” data-reactid=”100″>11:00 a.m. ET: Stocks pull off troughs, still sharply lower

Wall Street has clawed off session lows, but indexes remain well underwater as traders aggressively price in a worsening of the coronavirus outbreak. Here’s where major benchmarks are currently:

  • S&P 500 (^GSPC): -2.69% or -89.92 points to 3,247.83

  • Dow (^DJI): -2.79%, or -808.98 points to 28,183.43

  • Nasdaq (^IXIC): -3.31% or -316.59 points to 9,260.00

  • Crude oil (CL=F): -4.40% to $51.03 a barrel

  • Gold (GC=F): +1.77% to $1,678 per ounce

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="10:50 a.m. ET: Italy, already reeling, takes new blow from virus outbreak” data-reactid=”109″>10:50 a.m. ET: Italy, already reeling, takes new blow from virus outbreak

Via Reuters, Italy — a G7 economy that’s seen sluggish (if nonexistent) growth for much of the last decade, is all but certain to take another hit from the coronavirus’ appearance there. Over 220 people have been infected since Friday with six dead.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="From the story:” data-reactid=”111″>From the story:

The euro zone’s third-largest economy has been the most sluggish in the 19-nation bloc since the start of monetary union. It shrank by 9% in the wake of the 2008 global financial crisis and has recovered only about half of that since then.

Italian GDP fell by 0.3% in the fourth quarter of last year from the previous three months, yielding full-year growth of just 0.2%. Economists expected it to fare little better this year — and that was before the coronavirus hit.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="10:15 a.m. ET: WHO on coronavirus pandemic: ‘Not yet’” data-reactid=”119″>10:15 a.m. ET: WHO on coronavirus pandemic: ‘Not yet’

In its daily update, the World Health Organization’s director general made a distinction between the coronavirus being a contagious epidemic and a full-fledged pandemic:

“Our decision about whether to use the word “pandemic” to describe an epidemic is based on an ongoing assessment of the geographical spread of the virus, the severity of disease it causes and the impact it has on the whole of society.

“For the moment, we are not witnessing the uncontained global spread of this #coronavirus, and we are not witnessing large-scale severe disease or death. Does this virus have pandemic potential? Absolutely. Are we there yet? From our assessment not yet.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Meanwhile, The White House may seek up to $1 billion to prevent the virus from worsening in the United States.” data-reactid=”123″>Meanwhile, The White House may seek up to $1 billion to prevent the virus from worsening in the United States.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="10:14 a.m. ET: How the coronavirus will affect the global economy” data-reactid=”125″>10:14 a.m. ET: How the coronavirus will affect the global economy

Suppliers are already seeing delivery times soar because of the epidemic that's crippled China.Suppliers are already seeing delivery times soar because of the epidemic that's crippled China.

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Suppliers are already seeing delivery times soar because of the epidemic that’s crippled China.

Goldman Sachs took a knife to its U.S. estimates, shaving 0.2 percentage points off estimated Q1 GDP given the widening coronavirus outbreak. The bank warns that “risks are clearly skewed to the downside” in light of supply chain troubles, and will be felt in the following four ways:

The impact of the coronavirus on US growth is likely to come from four main channels, namely 1) reduced US goods exports to China, 2) reduced spending in the US by Chinese tourists and students, 3) a decline in US retailers’ services value added through lower US consumption of imported goods, and 4) a decline in US production due to supply chain production disruptions. The first two channels reduce output through lowering demand, while the latter two channels reduce output through a reduction in supply. 

In a separate note, Goldman cited evidence that suggested the virus’s spread “is likely having a somewhat gradual but still sizeable impact on macro data.”

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="9:50 a.m. ET: Expect cheaper energy prices until 2025: BofA” data-reactid=”151″>9:50 a.m. ET: Expect cheaper energy prices until 2025: BofA

The upside of the coronavirus crisis will be sharply lower energy prices, with the hit to global demand expected to keep crude depressed, according to Bank of America. In a research note to clients on Monday, analysts said they expect Brent to range-trade between $50 and $70 until 2025:

As prices become more anchored around $60, we believe volatility implied in oil options could trend lower in the medium term. In contrast to last year, we see more support to our price outlook on increased capital discipline across the US shale industry, despite coronavirus risks. Our projections assume OPEC+ is prepared to continue to lose share in the global oil market, particularly if pandemic risks rise again.

More broadly, we expect oil as a share of the global energy pie to will drop as well as the petroleum consumption mix keeps rotating away from gasoline and heavy ends into distillates and NGLs (natural gas liquids).

The bank also expects the oil market to need additional production cuts this year amid “modest” demand that will keep Brent averaging $62 per barrel in 2020.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="9:30 a.m. ET: Wall Street plunges at the opening bell” data-reactid=”157″>9:30 a.m. ET: Wall Street plunges at the opening bell

The escalating coronavirus crisis is taking a huge toll on financial markets. The bloodletting that started on Sunday with stock futures and continued through Asia and European session has now hit U.S. blue-chip and tech stocks. Some of the day’s biggest losers include bellwether names like Apple, Google and Tesla — all of which fell by around 5% on the day.

Here’s where the markets began Monday’s trading session, which is shaping up to be an ugly one:

  • S&P 500 (^GSPC): -3% or -100 points to 3,237.52

  • Dow (^DJI): -3.2% or -918.19 points to 28,074.13

  • Nasdaq (^IXIC): -3.52% or -336.76 points to 9,245.73

  • Crude oil (CL=F): -4.72% to $50.86 a barrel

  • Gold (GC=F): +2.18% to $1,684.70 per ounce

Analysts, however, don’t think the current drop will last. Invesco’s Brian Levitt told Yahoo Finance on Monday that the current scare is little more than a blip in a longer secular bull that won’t trigger a recession. “We will be back sometime later in this year talking about stabilizing economic activity.”

7:30 a.m. ET: Stock futures slump in early trading

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="U.S. stock futures appeared poised to extend last week’s losses, with each of the three major indices indicating a lower open as Wall Street grappled with the widening coronavirus crisis.” data-reactid=”174″>U.S. stock futures appeared poised to extend last week’s losses, with each of the three major indices indicating a lower open as Wall Street grappled with the widening coronavirus crisis.

Here’s were the main moves during the pre-market session, as of 7:30 a.m. ET:

  • S&P 500 futures (ES=F): 3,265.00, down 74.25 points or 2.22%

  • Dow futures (YM=F): 28,293, down 688.00 points or 2.37%

  • Nasdaq futures (NQ=F): 9,222.25, down 235.75 points or 2.49%

  • Crude oil (CL=F): $51.39 per barrel, down $1.99 or 3.73%

  • Gold (GC=F): $1,682.50 per ounce, up $33.70 or 2.04%

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="An unexpected surge in confirmed infections within South Korea and Italy — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic. Last week, the Hubei province at the epicenter of the coronavirus outbreak revised its method of counting cases for the third time this month, further undermining confidence in the country’s official counts.” data-reactid=”182″>An unexpected surge in confirmed infections within South Korea and Italy — which now has the largest cluster of cases outside of China — raised the possibility that the mystery virus could be mutating into a pandemic. Last week, the Hubei province at the epicenter of the coronavirus outbreak revised its method of counting cases for the third time this month, further undermining confidence in the country’s official counts.

It raises the stakes for the entire global economy rather than just China, where the overwhelming majority of the world’s nearly 80,000 cases are located. According to Marc Chandler at Bannockburn Global Forex:

The [coronavirus] has not only crippled the Chinese economy, but its sheer size and magnitude of its integration in the global supply chains have far-reaching knock-on effects.  Asia-Pacific economies that were increasingly reliant on Chinese input and demand are the most vulnerable.  Estimates suggest that the world’s second-largest economy is operating well less than 50% of capacity. 

Indeed, the extension of the stoppages and disruptions increase the likelihood that the Chinese economy contracts in Q1 [and] The supply chain disruptions are adversely impacting Japanese and Korean automakers.  German automakers derived a substantial share of their profits from China, and car sales continue to weaken. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The virus is sending ripples across the global supply chain, with names like Volkswagen, Burberry, Starbucks and Apple among the growing list of multinationals whose operations are being adversely impacted by the outbreak.” data-reactid=”186″>The virus is sending ripples across the global supply chain, with names like Volkswagen, Burberry, Starbucks and Apple among the growing list of multinationals whose operations are being adversely impacted by the outbreak.

Numbers showing the state of the Dow Jones Industrial Average are displayed above the floor after the closing bell at the New York Stock Exchange (NYSE) in New York City, U.S., February 21, 2020. REUTERS/Andrew KellyNumbers showing the state of the Dow Jones Industrial Average are displayed above the floor after the closing bell at the New York Stock Exchange (NYSE) in New York City, U.S., February 21, 2020. REUTERS/Andrew Kelly

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Numbers showing the state of the Dow Jones Industrial Average are displayed above the floor after the closing bell at the New York Stock Exchange (NYSE) in New York City, U.S., February 21, 2020. REUTERS/Andrew Kelly

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Fill up today! Here's when gas prices will rise seven cents a litre in Ottawa – CTV News Ottawa

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Ottawa motorists will want to fill up the gas tank on Saturday, before prices start to rise at the end of the weekend.

Gas prices dropped to their lowest level in six months at Ottawa stations on Saturday, at $1.599 a litre.  According to ottawagasprices.com, some stations in Ottawa were selling gas for $1.54 a litre.

Prices have dropped 20 cents a litre in Ottawa since Thursday.

However, Canadians for Affordable Energy President Dan McTeague is telling motorists to fill up the gas tank today.

McTeague forecasts prices will rise seven cents a litre in Ottawa and across Ontario on Sunday to 166.8 cents a litre.

Gas prices in Ottawa have dropped 56 cents a litre since hitting a record high of 215.9 cents a litre on June 11. A drop in demand and rising fears about a recession drove down the price of oil. The Ontario government cut the gas tax rate on July 1 from 14.7 cents per litre to 9 cents per litre.

Speaking on Newstalk 580 CFRA’s Ottawa at Work on Friday, McTeague said the recent drop in gas prices is welcome, but “don’t expect it to last.”

“The markets, I think, are overestimating the amount of demand drop we’ve seen in the United States and underestimating the severest supply shortage that we’re having,” McTeague said.

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Pandemic benefits were too generous with businesses, stringent with workers: experts – CP24 Toronto's Breaking News

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Nojoud Al Mallees, The Canadian Press


Published Saturday, August 6, 2022 11:21AM EDT

Benefits rolled out at the onset of the COVID-19 pandemic allowed vulnerable Canadians to stay healthy while maintaining an income, but business supports were excessive and show the outsized influence of business groups on public policy, economists say.

Nearly two and a half years ago, the federal government faced an unprecedented task of shutting down the economy to slow the rapid spread of COVID-19. That shutdown led to a series of pandemic relief benefits aimed at softening the blow to workers and businesses, with the two most prominent programs being the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy.

Recent analysis from Statistics Canada based on census data shows two-thirds of Canadian adults received pandemic benefits in 2020, with these benefits cushioning income losses and reducing inequality.

Previous analysis from the federal statistics agency also found that, as was expected, usage of the wage subsidy program correlated with a lower probability of closure and fewer employee reductions.

While there was little time to spend on crafting the benefits and fine-tuning the details in March 2020, economists are now assessing the successes and failures of these programs in retrospect.

City of New York University economics professor Miles Corak, who has written analyses on these programs, says any evaluation needs to account for the uncertainty people and governments were facing at the time and the urgent need to keep people healthy.

That said, Corak said while the CERB was “terribly successful,” the Canada Emergency Wage Subsidy was a “huge failure.”

“The Canada Emergency Response Benefit got money out the door quickly in time to keep people at home, which is what we wanted to do to save lives,” he said.

On the other hand, Corak said the CEWS “came too late, it wasn’t well-targeted and dramatically over-insured (businesses).”

The CERB was quickly announced in March 2020 and $2,000 monthly to Canadians who lost income because of the pandemic shutdown. That was followed soon after by the CEWS, which subsidized businesses’ employee wages by 75 per cent in hopes of encouraging companies to hold on to their staff.

Corak says that by the time the wage subsidy was introduced, many businesses had already parted ways with their employees.

Another source of criticism for the wage subsidy program was that it subsidized wages for all workers at affected businesses, rather than simply those whose jobs were at risk of being lost, making it especially costly.

Jennifer Robson, an associate professor of political management at Carleton University, also pointed to the wage subsidy program as being unsuccessful. Robson said businesses that would have otherwise closed down for reasons unrelated to the pandemic remained artificially afloat because of the wage subsidy.

“These were not businesses that were going to return to profitability,” Robson said.

Statistics Canada data shows the number of business closures spiked dramatically in April 2020, but a sharp decline followed, bringing monthly closures to a lower level than pre-pandemic.

About 31,000 businesses closed in August 2020, while nearly 40,000 had closed in February 2020. 

In hindsight, Corak said the wage subsidy program should have been smaller in scope and targeted to larger businesses with specialized needs where it would be important for companies to hold on to the same employees, such as the airline sector.

The Canadian Federation of Independent Business has said the wage subsidy was “crucial” for small business owners and noted in April this year that only two of five of its members reported being back to normal sales.

Adrienne Vaupshas, the press secretary for Finance Minister Chrystia Freeland, said in a statement the focus of the government at the onset of the pandemic was to protect jobs and ensure a strong economic recovery.

“Today we have recovered 114 per cent of the jobs that were lost during the darkest months of the pandemic,” Vaupshas said.

In contrast to what some economists have characterized as excessively generous supports for businesses, some low-income Canadians have experienced clawbacks to social assistance benefits because they collected CERB. The Canada Revenue Agency is also hoping to recoup benefits paid out to over 400,000 Canadians whose eligibility was questioned.

In response, anti-poverty group Campaign 2000 has called for CERB amnesty.

Corak said while it’s reasonable to ask those who fraudulently collected benefits to pay them back, businesses should be held to the same standard.

“The concern I would have is the asymmetry in this response between individuals and businesses,” Corak said.

The CFIB has called for more loan forgiveness for small businesses who accessed loans through the Canada Emergency Business Account. The federal government is already offering partial loan forgiveness if repayments are made by the end of 2023.

Robson said when it comes to shaping public policy, business interest groups have well-resourced public relations teams to further their interests.

“There is nothing like that for individual low-wage workers,” said Robson.

Corak noted that at the start of the pandemic, there was a focus on the role of front-line workers, but with time, this shifted to small businesses.

“I think the small business lobby was very effective in informing individual MPs and putting pressure on cabinet and the government to respond in a way that many unseen and unheard mothers, fathers workers and families just didn’t have that same voice,” Corak said.

The danger of the wage subsidy program, Corak said, is that it sets a precedent for providing excessive subsidies to businesses and thereby stifling innovation.

“We’re almost moving towards a basic income for small business rather than a basic income for individuals,” he said.

This report by The Canadian Press was first published Aug. 6, 2022.

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'Head-scratcher:' Economists weigh in on Canada's surprise job loss – Yahoo Canada Finance

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jobs-canada-gs0805

jobs-canada-gs0805

Canada’s July jobs reading caught economists by surprise with a loss of 30,600 positions rather than an expected gain of 15,000 for the month.

Despite the negative reading coming on the heels of a still larger decline in June, the unemployment rate stuck to its historic low of 4.9 per cent based, according to Statistics Canada, on a drop in Canada’s participation rate.

“Canada’s labour market is not in disarray,” said National Bank economists Kyle Dahms and Alexandra Ducharme, in their jobs commentary, noting that year-to-date, the private sector has added 110,000 positions. The pair said they continue to see “resilience in the Canadian economy” making them outliers among other big bank analysts.

After digesting July’s numbers, most economists appear to have taken away two narratives:

  • The Bank of Canada won’t be deterred from raising rates further, and possibly with another bigger than normal hike.

  • July’s jobs reading hints at an economy that is beginning to “lose steam.”

Here are the economists in their own words:

Rishi Sondhi, TD Economics

“That’s two in a row in terms of weak headline jobs prints, and employment has now averaged an 11k decline over the past three months. This is consistent with our view that economic growth will soften in the second half of the year. The details skewed to the softer end in July, as full-time employment accounted for a larger share of the overall jobs decline than in June, and hours worked also fell. The latter is particularly notable as it could signal a soft print for monthly GDP, following flat growth in May and a sub-trend gain in June (based on Statcan’s preliminary estimate).”

Stephen Brown, Capital Economics

“The second consecutive monthly decline in employment will raise a few eyebrows at the Bank of Canada but, with the unemployment rate unchanged at a record low and wage growth still strong, we doubt it will prevent the Bank from hiking its policy rate by a further 100 bp at the next two meetings…. While the increase in average hourly earnings was a little lower than we expected, at 0.4% m/m, that gain is still too high for comfort in terms of meeting the Bank’s 2% CPI inflation target. At the margin, the July LFS may tilt the odds a bit toward a 50 bp rate hike in September rather than a 75 bp one, but we doubt it will be the deciding factor.”

Andrew Grantham, CIBC Economics

“The Canadian employment figures were somewhat of a head-scratcher again in July, with employment falling for a second consecutive month but the unemployment rate remaining historically low. The 31K decline in jobs came against consensus expectations for a 15K gain, and added to the 43K decline in the prior month. However, a two-tick decline in the participation rate meant that the jobless rate remained at 4.9%. Job losses were strangely concentrated in the services sector, including wholesale & retail, education and health. With some of those sectors reporting high vacancy rates, labour supply rather than demand appears to be the main issue. That said, the major difference between today’s report and last month’s is that wage growth unexpectedly decelerated (to 5.4% y/y from 5.6% and against consensus expectations for 5.9%) although we always caution that the LFS wage series is extremely volatile month/month. While today’s figures muddy the waters further for policymakers, the Bank of Canada will likely focus on the historic low unemployment rate and still strong wage growth to justify another non-standard rate hike at its next meeting.”

Carrie Freeston, RBC Economics

“In the months ahead we will begin to see the economy lose steam. We are already observing jobless claims rising South of the border, as U.S. labour demand begins to cool. Canada will not be far behind. With the Bank of Canada having raised the overnight rate by 225 basis points (to 2.5%) since March, and at least another 75 basis points slated for the fall, inflation pressures will ease. And labour markets are expected to cool. Our forecast calls for the unemployment rate to begin to trend higher in the coming months and into 2023.”

Douglas Porter, BMO Economics

“Canada’s job market is clearly losing momentum in a hurry, likely due to both a marked cooling in the broader economy but also because a lack of available workers. The downward drift in the participation rate, especially for the 15-64 group, is worth watching closely, with the potential to tighten the labour market further. For the Bank of Canada, the takeaway will be that while growth is clearly cooling, conditions remain drum-tight and wages are stirring. We believe this backdrop is consistent with another rate hike at the September meeting, but of a less aggressive nature than the mega 100 bp move in July. We look for a 50 bp hike at that time.”

Marc Desormeaux, Desjardins Economics

“July’s data were well below the consensus projections, and as such shaved our call for Q3-2022 real Canadian GDP growth to just below 1% (q/q saar). Decelerating wage gains suggest that some progress has been made in the fight against inflation, but the rate of hourly earnings growth continues to track prices closely. Accordingly, while we think inflation may have peaked and have noted previously that the Canadian economy is historically sensitive to interest rate increases, we believe the Bank of Canada will put more weight on the extremely tight labour market and raise rates by 50 bps at its September meeting.”

Kyle Dahms/Alexandra Ducharme, National Bank Economics

Canada lost 31K jobs in July, a second consecutive monthly decline. Despite this development, Canada’s labour market is not in disarray. July’s losses were concentrated in public sector jobs. This sector indeed suffered its worst loss outside of a the pandemic since 1976 (-51K), a perplexing development considering the state of public finances at both the federal and provincial levels. Private sector employment, while also down in July, is still up 110K year-to-date with continued contribution from construction and manufacturing during the month. Despite the July decline, the unemployment rate remained unchanged at its lowest level since 1970 due to a 0.2 pp drop in the participation rate, a third decline in four months. With the unemployment rate remaining historically low, we still see resilience in the Canadian domestic economy. This robustness is also confirmed by the evolution of the wages of permanent employees, which grew 5.4% over the last twelve months, down from June’s 5.6% print but still historically high. At this juncture, the Bank of Canada is still on track to hike at its next meeting on the 7th of September with labour shortages continuing to persist according to the latest figures by the CFIB (Canadian Federation of Independent Business).

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