New York Governor Andrew Cuomo gives his a press briefing about the coronavirus crisis on April 17, … [+] 2020 in Albany, New York. He extended quarantine measures until May 15. “We have to continue doing what we’re doing. I’d like to see that infection rate get down even more,” he said. (Photo by Matthew Cavanaugh/Getty Images)
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President Donald Trump was being his usual self on Friday. This time, he was blasting New York governor Andrew Cuomo during a live press conference on his Twitter feed, practically demanding Cuomo thank him for all he’s done. Instead, Cuomo said Trump should be at work, not watching TV, and not on Twitter.
Regardless, this week we moved beyond the fears of hospital exhaustion rates and COVID-19 patients unable to get a ventilator to calls to “liberate Michigan” and other states.
It will all be politicized. Markets won’t care.
So long as governors are coming up with plans for a gradual re-opening, as well as the White House, then investors will confirm among themselves — with increasing surety — that there is light shining through the cracks. We can dig ourselves out of this hole.
It’s a hole that Ray Dalio, famed hedge fund manager from Bridgewater Associates, said this week in Bloomberg webinar has cost the U.S. around $5 trillion in lost wages.
A health care worker shapes a heart through a window at Jacobi Medical Center on April 17, 2020 in … [+] the Bronx, New York.(Photo by ANGELA WEISS/AFP via Getty Images)
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On April 14, St. Louis Fed Chief Jim Bullard made the case for a V-shaped recovery once the economy is open, and millions furloughed get their jobs back.
In a webcast with the St. Louis Regional Chamber, Bullard said, “There is no reason the economy can’t come back in a V shape. I know it’s become popular to say that is not going to happen. I think it can happen.”
According to Bullard’s vision of the near-term future, the U.S. will adopt a variant of Asia’s mitigation methods of using widespread testing, social distancing and vigilance to contain the virus spread in a gradual re-open.
“As incidents of the disease go way down, then I think you should be able to reopen,” Bullard said. “Ideally you would like to test everybody. If you can’t test everybody, you are going to have to use relatively crude substitutes, like taking everybody’s temperature.”
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis: rolling shutdowns for a year, … [+] or until vaccine. Photographer: Chris Goodney/Bloomberg
Bullard’s comments pleased Wall Street and was a welcome note of optimism in contrast to doom-and-gloom projections of rolling shutdowns as offered by Minnesota Fed Chief Neel Kashkari on “60 Minutes” on April 5.
Then again, that was prior to “hell week”. That was the week that was supposed to be one part September 11 terrorist attack, one part Pearl Harbor. Luckily, that did not happen as mitigation efforts are clearly having the desired effect on the viral spread.
Wall Street Ready. Main Street Wary, But Hopeful
Markets have been ahead of the curve.
Since bottoming on March 23, the S&P has rallied about 24%. The bear market in equities is over for now. The Dow is down 17% from its February 19 high.
On April 16, the Trump Administration issued their own guidelines to enable individual states to reopen. Some states were already coordinating on this, even as New York and Connecticut extended the lockdown until mid May.
Under the guidelines, states are asked to reopen one step at a time, rather than all at once. The main policies and timelines are up to individual governors, with the White House Coronavirus Task Force providing guidelines.
Better yet, the guidelines were approved by Task Force medical leaders Anthony Fauci and Deborah Birx, making it harder for Trump’s opponents to lay blame on him should COVID-19 death rates continue unabated post-quarantine. This is on doctors Fauci and Birx, too.
A recent Gallup poll suggests the vast majority have grown accustomed to the lockdowns and do not want to press their luck in opening too soon.
According to pollsters at Ipsos, U.S. consumer confidence has been stagnant since it declined precipitously in the third week of March as the COVID-19 pandemic led to millions of job losses.
Wage and employment gains won in the Trump presidency have been lost. He hopes he can get most of it … [+] back if the economy re-opens next month. (Photo by Alex Wong/Getty Images)
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Their latest survey, conducted on April 14 and 15, shows that while the mood is depressing, people remain hopeful.
Consumer confidence dropped to 45.1 on their index ranging on a scale of 1 to 100 from 46 a month ago. That’s down 18 points from where it was in January, an 18-year high at the time. It’s also down from where it was in March, at 60.1.
Confidence in one’s personal financial situation, the local economy and employment six months from now is 60.2, about three points lower than where it was in March and on par with historical averages.
In percentage terms, 71% said they are less comfortable buying big ticket items today than they were six months ago. That number has been relatively flat over the last two weeks.
The battle to re-open the economy is happening around the world.
In Brazil, the battle to open it happened right at the time it was being closed.
Brazil’s version of Fauci, Health Minister Luiz Mandetta, was let go this week due to disagreements on how to balance fighting the viral spread, and keeping Brazilians — many of them who were sent back to the poor house after two years of economic recession — gainfully employed. Brazil does not have the money to pay for millions of unemployed people like the U.S. and Europe.
In Europe, they are gradually re-opening in certain areas of Italy and Austria. The German’s are, too, but they are fighting over dates.
China has been open, but in fits and starts. They are setting an example for what the rest of the world can expect once they get back to work.
In deciding to postpone New York state’s opening until May 15, Governor Cuomo stated that he wants to see infection rates fall lower on the infection curve first.
Some 28,823 people have died from COVID-19 in the U.S. as of Friday, with another 4,226 having COVID-19 as a probable cause, according to the Center for Disease Control and Prevention.
Over 22 million people have been laid off nationwide, with many of them expected to return to work once the economy gets going again.
Others have taken wage cuts and lost bonuses for the year, which is the equivalent of a wage cut. Those won’t be coming back.
Once the economies do re-open, no one is expecting to see crowded restaurants, bars and planes anytime soon. Like the gradual opening of the economy, people will gradually get over their fears of catching COVID-19.
As scientists and the medical community share ideas about what they know of the disease, and how to treat it, there will be less unknowns, ushering in a return to normalcy.
Memorial Day weekend 2019 in Asbury Park, New Jersey. Memorial Day is the unofficial start of … [+] summer. Last year the government banned vaping and smoking at the Jersey Shore. Will they ban going to the beach this Memorial Day? (Photo by Kena Betancur/Getty Images)
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I have Memorial Day weekend as what I call my “pitchforks and torches” date.
If by then states are still in nearly full quarantine, with people banned from gathering on beaches and restaurants still closed, my guess is that small business owners, and individuals will increasingly lose their patience.
Some protests already occurred this week, though I do not know who organized them. Attendees were quickly dismissed as the usual cast of right wingers supporting Trump’s call to re-open.
Memorial Day weekend is the official start of the important summer business season for numerous cities from Kennebunkport to Provincetown; Myrtle Beach to Kissimmee and Orlando, Florida. The call for a return to normal will get louder there as many shop owners survive the year on Memorial Day to Labor Day consumer spending.
Who will see a continued need for strict quarantine measures if governors are saying their hospitals are in the clear? Protecting hospitals from a surge in COVID-19 patients was the main reason for the quarantine measures.
If Wall Street’s rising, but Main Street is closed, it creates more wealth for those heavily invested in the market, and is a loss of wealth for those dependent on wages to maintain their economic status.
That’s when coronavirus ceases to become a public health crisis, and it becomes a financial crisis because companies and individuals cannot pay their bills.
Instead of a financial crisis caused by bankers gambling on mortgage-backed derivatives like in 2008, it’s one forced upon the masses to protect them from an unknown virus. People get that. But when the pandemic is over, the socio-economic and political crisis will last longer if the economy remains in intensive care.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
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.
