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The bad news keeps coming for the U.S. economy, but it might not be as bad as it looks – MarketWatch

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The bad news keeps coming for the U.S. economy, but don’t expect investors to worry all that much early in the new year.

The government on Friday said the U.S. lost 140,000 jobs in December, marking the first decline in employment since the economy was walloped last spring by the arrival of the coronavirus pandemic. A slew of other indicators have also pointed to a weaker economy.

The prognosis isn’t going to get much better this week.

Retail sales data for December, the headline attraction next Friday, might eke out a small gain. Auto purchases snapped back in December and the holiday shopping season likely goosed sales.

Other reports are expected to show a still-high number of layoffs each week, frail consumer confidence and fewer job openings.

See: MarketWatch Economic Calendar

Not that Wall Street is worried. The Dow Jones Industrial Average
DJIA,
+0.18%

climbed above 31,000 last week for the first time ever.

Even as the economy flails again under the weight of a record increase in coronavirus infections and deaths, investors are casting their eyes to the future. Vaccines are now being distributed slowly across the country and President-elect Joe Biden has promised to provide more federal aid for the economy.

“If we get the vaccines distributed efficiently, there is a strong base to build on,” said chief economist Robert Dye of Comerica Bank in Dallas.

The latest employment report for December, what’s more, contained more than a few glimmers of hope. Most of the job losses were concentrated once again in bars, restaurants, hotels and entertainment — business that deal directly with customers.

Read: Restaurants lose another 372,000 jobs in December

Most other major segments of the economy, however, actually added more jobs in December than in November. That suggests the viral outbreak hasn’t done much damage outside of leisure and hospitality.

“Beneath the surface it was actually a fine report,” said chief economist Tom Porcelli of RBC Capital Markets.

The gulf between how investors view the present and future is likely to persist for some time — not that it matters to the people who’ve just lost their jobs or might soon.

What will help unemployed Americans and the broader economy in the meantime is a package of federal aid signed by outgoing President Trump in December and the prospect of more aid to come from the Biden administration.

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Economists predict slight rebound and moderate growth for B.C. economy in 2021 – North Shore News

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VICTORIA — Finance Minister Selina Robinson said she’s encouraged by predictions that British Columbia’s economy will rebound this year and next. 

Robinson heard Friday from economists on the province’s Economic Forecast Council who estimate B.C. is on track for real GDP growth of 4.7 per cent this year and 4.3 per cent next year, before growth slows. 

The same measurement for the provincial economy in 2020 shows a 5.1 per cent decline, the worst contraction since 1980.

“We can see the light at the end, but we’re still in the tunnel,” Robinson said in an interview after the hearing from the council. 

The council of economists from major financial institutions and business associations warned that the strength of recovery depends heavily on the rollout of COVID-19 vaccines. 

Recovery is expected to escalate as the province reaches herd immunity and consumer activity increases, while work ramps up in areas like construction on resource projects.

All signs point to a strong recovery in the United States, which will also help boost B.C.’s rebound, several economists said during the session. 

But Robinson also heard the recovery won’t be felt evenly, with certain hard-hit industries and low-wage earners tending to suffer the greatest ongoing impacts of the pandemic. 

Women, people of colour and those without more than a high school education have fared worse than others, Robinson heard. 

At the same time, the skilled labour market is expected to tighten, suggesting good government policy could involve investment in training, education and financial support for those transitioning to new industries, she heard. 

“Obviously, here we are 10 months out and there are some doing really well and others being completely left behind,” Robinson said. 

“What caught my attention was making sure that we’re investing right now in people, but also into the future.”

Online shopping will likely change retail in the long term, while struggling sectors like tourism may see a strong, if delayed, rebound thanks to pent-up demand for travel and leisure, Robinson heard. 

The challenge will be to bridge the current situation to the time when there is herd immunity, while maintaining an active tourism sector, she said. 

The minister said the next B.C. budget will focus on continuing to support British Columbians through the emergency of the pandemic while investing in the future. 

The government will table its budget on April 20 after legislation passed in December allowed it to delay its introduction from the traditional date in February.

The B.C. government announced late last year that the deficit forecast had grown and the budget shortfall was expected to hit $13.6 billion this fiscal year. 

The Finance Ministry predicted B.C.’s economy would decline by 6.2 per cent in 2020, but growth was expected to rebound to three per cent in 2021. 

Liberal finance critic Mike Bernier said the economic forecast report makes clear there is much more work in store for the New Democrat government on the road to economic recovery. It begins with fixing “growing problems” in their current support programs, he said in a statement. 

“The forecast council is doing important work looking ahead to the economic future of British Columbia, and that is certainly vital, but we cannot let the government forget about the here and now,” Bernier said. 

He accused the government of fumbling the provision of economic support at nearly every turn, from delayed pandemic pay to a “botched” rollout for small and medium-sized businesses. 

Of the $300 million set aside for B.C. businesses at the beginning of the pandemic, only $21 million has been distributed, Bernier said. 

“We need to see (Premier) John Horgan and his government take immediate steps to fix their ineffective programs and provide people with the relief they need to make it through this pandemic.”

This report by The Canadian Press was first published Feb. 26, 2021.

Amy Smart, The Canadian Press

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Canadian dollar falls by most since October as risk appetite frays

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar tumbled against its broadly stronger U.S. counterpart on Friday as this week’s spike in bond yields weighed on investor sentiment, with the loonie extending its pullback from a three-year high the day before.

The Canadian dollar was trading 0.9% lower at 1.2710 to the greenback, or 78.68 U.S. cents, its biggest decline since last October. It touched its weakest since Feb. 18 at 1.2729, while it was down 0.8% for the week.

On Thursday, the loonie touched its strongest intraday level since February 2018 at 1.2464.

“The loonie is losing ground along with other risk assets as market volatility increased on a small tantrum over the rising U.S. yields,” said Amo Sahota, director at Klarity FX in San Francisco.

The safe-haven U.S. dollar rose against a basket of major currencies and global equity markets swooned, even as the bond selloff eased a bit. Fears of rising inflation still weighed on sentiment as data showed a strong rebound in U.S. consumer spending.

“The underlying fundamentals are unchanged so commodity demand strength will remain robust and that should help underpin the loonie and prevent this from turning into a complete rout,” Sahota said.

Oil prices settled 3.2% lower at $61.50 a barrel as forecasts called for crude supply to rise in response to prices climbing above pre-pandemic levels.

Canada‘s C$100 billion ($79 billion) stimulus plan is justified by the economic hole caused by the COVID-19 pandemic, government sources said, as analysts warned Ottawa against racking up too much debt and making investments that fail to boost growth.

Canadian government bond yields fell across a flatter curve in sympathy with U.S. Treasuries. The 10-year was down 6.8 basis points at 1.398%.

On Thursday, it touched a 13-month high at 1.486%, while it was up 18.5 basis points for the week.

 

(Reporting by Fergal Smith; Editing by Steve Orlofsky and David Gregorio)

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Economists predict slight rebound and moderate growth for B.C. economy in 2021 – The Tri-City News

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VICTORIA — Finance Minister Selina Robinson said she’s encouraged by predictions that British Columbia’s economy will rebound this year and next. 

Robinson heard Friday from economists on the province’s Economic Forecast Council who estimate B.C. is on track for real GDP growth of 4.7 per cent this year and 4.3 per cent next year, before growth slows. 

The same measurement for the provincial economy in 2020 shows a 5.1 per cent decline, the worst contraction since 1980.

“We can see the light at the end, but we’re still in the tunnel,” Robinson said in an interview after the hearing from the council. 

The council of economists from major financial institutions and business associations warned that the strength of recovery depends heavily on the rollout of COVID-19 vaccines. 

Recovery is expected to escalate as the province reaches herd immunity and consumer activity increases, while work ramps up in areas like construction on resource projects.

All signs point to a strong recovery in the United States, which will also help boost B.C.’s rebound, several economists said during the session. 

But Robinson also heard the recovery won’t be felt evenly, with certain hard-hit industries and low-wage earners tending to suffer the greatest ongoing impacts of the pandemic. 

Women, people of colour and those without more than a high school education have fared worse than others, Robinson heard. 

At the same time, the skilled labour market is expected to tighten, suggesting good government policy could involve investment in training, education and financial support for those transitioning to new industries, she heard. 

“Obviously, here we are 10 months out and there are some doing really well and others being completely left behind,” Robinson said. 

“What caught my attention was making sure that we’re investing right now in people, but also into the future.”

Online shopping will likely change retail in the long term, while struggling sectors like tourism may see a strong, if delayed, rebound thanks to pent-up demand for travel and leisure, Robinson heard. 

The challenge will be to bridge the current situation to the time when there is herd immunity, while maintaining an active tourism sector, she said. 

The minister said the next B.C. budget will focus on continuing to support British Columbians through the emergency of the pandemic while investing in the future. 

The government will table its budget on April 20 after legislation passed in December allowed it to delay its introduction from the traditional date in February.

The B.C. government announced late last year that the deficit forecast had grown and the budget shortfall was expected to hit $13.6 billion this fiscal year. 

The Finance Ministry predicted B.C.’s economy would decline by 6.2 per cent in 2020, but growth was expected to rebound to three per cent in 2021. 

Liberal finance critic Mike Bernier said the economic forecast report makes clear there is much more work in store for the New Democrat government on the road to economic recovery. It begins with fixing “growing problems” in their current support programs, he said in a statement. 

“The forecast council is doing important work looking ahead to the economic future of British Columbia, and that is certainly vital, but we cannot let the government forget about the here and now,” Bernier said. 

He accused the government of fumbling the provision of economic support at nearly every turn, from delayed pandemic pay to a “botched” rollout for small and medium-sized businesses. 

Of the $300 million set aside for B.C. businesses at the beginning of the pandemic, only $21 million has been distributed, Bernier said. 

“We need to see (Premier) John Horgan and his government take immediate steps to fix their ineffective programs and provide people with the relief they need to make it through this pandemic.”

This report by The Canadian Press was first published Feb. 26, 2021.

Amy Smart, The Canadian Press

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