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The truth about how much Delta is hurting the US economy – CNN

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New York (CNN Business)Is the Delta variant hurting the economy? It depends on who you ask.

A handful of businesses over the past several weeks have said customers are closing their purses. Consumer confidence fell through the floor, and retail sales sank.
Yikes, right? Well, maybe not.
Job growth remains electric. Inflation has come off its highs, and the broadest measure of the economic activity showed considerable strength in the spring.
The US economy is putting out a lot of mixed signals: While the Delta variant is weighing on economic data and consumer sentiment, the recovery is still chugging along and plenty of businesses remain optimistic about the future.
So what gives?
Economic data are a weird beast. On the one hand, it’s the best shot we have at learning about what’s going on. But month-to-month, these stats can be noisy, distorted by temporary factors. That makes it harder to see trends.
It’s too early to tell if the Delta variant is slowing the pace of the economic recovery enough to be concerned. Infection rates are reported nearly in real time, but economic data are always looking backward. Meanwhile, companies are looking forward, trying to judge how their customers might react to outside factors in the future. It’s a cloudy crystal ball at best.
Either way, the bottom line is this: The pandemic isn’t yet over. That means economic conditions keep evolving, maintaining businesses, consumers and the recovery in a chokehold.

What the data says

First, let’s tackle the bad news: Some recent economic data are painting a lousy picture. Early consumer sentiment data for August showed a crash below pre-pandemic levels, falling to its lowest mark since December 2011. People are judging that Delta will hurt the recovery, as well as their daily lives. After hot vax summer was cut short by the variant, people are digesting the realization that the pandemic is not in fact about to be over.
Retail sales fell more than expected in July, both including and excluding auto sales.
On Monday, data from IHS Markit showed US private sector growth slowed sharply in August, as supply chain and capacity constraints continued and the variant added a new negative into the mix. The composite purchasing managers’ index, which measures business activity in the services sector and manufacturing output, fell to its lowest level in eight months.
But here’s the good news: Economists are confident that the higher case numbers won’t lead to lockdowns like last year, particularly now that vaccines are widely available.
The Back-to-Normal Index created by CNN Business and Moody’s Analytics has been holding steady at 92% in recent weeks, but some states’ economies are better now than they were before the pandemic.
And inflation is finally starting to show up in the rearview mirror. Higher prices have been a hallmark of the recovery, but in July, consumer price inflation began to moderate.
Job growth has been booming, with more than 900,000 jobs added in both June and July. For August, economists predict another 725,000 jobs added, according to Refinitiv. The August jobs report will come out next week Friday.
“The Delta variant is a relatively new wrinkle to a jobs recovery that has been uneven to date,” Nela Richardson, chief economist at ADP, told CNN Business. With companies keen to hire and take advantage of the reopened economy and many workers still hesitant to put themselves at risk, the mismatch between labor demand and supply will likely continue in the face of the variant.
That said, each resurgence in the virus has resulted in less and less economic damage, said Jack Janasiewicz, portfolio strategist at Natixis Investment Managers — not least because state and local governments have become hesitant to lock down their economies again, instead pushing vaccines and masking indoors.
It will be another two months until we get some bigger picture data with the third quarter gross domestic product numbers, the single broadest measure of economic activity. Until then, the jury is still out on how much of a mark Delta will leave on the pandemic recovery.

What businesses say

The reaction to Delta among American businesses isn’t unanimous, either.
Travel and leisure companies such as Southwest Airlines (LUV), Airbnb and Disney (DIS) said last week that rising Covid infections are hurting business. TJX (TJX), the owner of TJ Maxx, Marshalls and HomeGoods, said during last week’s earnings that sales had begun to slow down in the last week of July and into the first two weeks of August, which it attributed to the variant.
“If you are concerned about Delta, the first thing you do is stop getting on planes or going to restaurants,” Michael Baker, a retail analyst at D.A. Davidson, said in an email.
That’s why hospitality and leisure, once again, will be worse affected by the resurgence in Covid cases than other areas of the economy, including shops.
But other major retailers that reported earnings last week remained cautiously optimistic regarding sales for the rest of the year.
Big box giants Walmart (WMT) and Target (CBDY) said shoppers have been returning to stores in recent months and stocking up on back-to-school supplies, clothing, beauty, food and other essential items. Customers “have emerged from a year in which digital was the primary growth driver and they’re now returning to our stores in droves,” Target CEO Brian Cornell said on a call with analysts last week.
“We’re seeing tremendous resilience in the consumer today. And our traffic patterns, I think, represent that, as we see this consistent flow of traffic into our stores,” he added.
So far, the Delta variant hasn’t yet altered customer behaviors, but the company is carefully monitoring the impact, executives said.
Macy’s (M) and Kohl’s (KSS) also reported benefiting from customers refreshing their wardrobes after months of working from home, but Kohl’s executives said Delta’s effect on consumers was unpredictable.
“There’s a heightened level of uncertainty as we look to the back half of the year with the Delta variant,” said the company’s CFO Jill Timm. “What is that going to do for consumer confidence?”

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Province Invests in Wellington County Businesses to Boost Local Economy – Government of Ontario News

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Province Invests in Wellington County Businesses to Boost Local Economy  Government of Ontario News



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Powell meets a changed economy: Fewer workers, higher prices – 95.7 News

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WASHINGTON (AP) — Restaurant and hotel owners struggling to fill jobs. Supply-chain delays forcing up prices for small businesses. Unemployed Americans unable to find work even with job openings at a record high.

Those and other disruptions to the U.S. economy — consequences of the viral pandemic that erupted 18 months ago — appear likely to endure, a group of business owners and nonprofit executives told Federal Reserve Chair Jerome Powell on Friday.

The business challenges, described during a “Fed Listens” virtual roundtable, underscore the ways that the COVID-19 outbreak and its delta variant are continuing to transform the U.S. economy. Some participants in the event said their business plans were still evolving. Others complained of sluggish sales and fluctuating fortunes after the pandemic eased this summer and then intensified in the past two months.

“We are really living in unique times,” Powell said at the end of the discussion. “I’ve never seen these kinds of supply-chain issues, never seen an economy that combines drastic labor shortages with lots of unemployed people. … So, it’s a very fast changing economy. It’s going to be quite different from the one (before).”

The Fed chair asked Cheetie Kumar, a restaurant owner in Raleigh, North Carolina, why she has had such trouble finding workers. Powell’s question goes to the heart of the Fed’s mandate of maximizing employment, because many people who were working before the pandemic lost jobs and are no longer looking for one. When — or whether — these people resume their job hunts will help determine when the Fed can conclude that the economy has achieved maximum employment.

Kumar told Powell that many of her former employees have decided to permanently leave the restaurant industry.

“I think a lot of people wanted to make life changes, and we lost a lot of people to different industries,” she said. “I think half of our folks decided to go back to school.”

Kumar said her restaurant now pays a minimum of $18 an hour, and she added that higher wages are likely a long-term change for the restaurant industry.

“We cannot get by and pay people $13 an hour and expect them to stay with us for years and years,” Kumar said. “It’s just not going to happen.”

Loren Nalewanski, a vice president at Marriott Select Brands, said his company is losing housekeepers to other jobs that have recently raised pay. Even the recent cutoff of a $300-a-week federal unemployment supplement, he said, hasn’t led to an increase in job applicants.

“People have left the industry and unfortunately they’re finding other things to do,” Nalewanski said. “Other industries that didn’t pay as much perhaps … are (now) paying a lot more.”

Christopher Rugaber, The Associated Press

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Dialogue NB Seeks To Rebuild An Inclusive Economy Through Conversation – Huddle – Huddle Today

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MONCTON – Dialogue NB CEO Nadine Duguay-Lemay says the business community has an integral place in a conversation about building a more equal and just New Brunswick.

That very conversation will take place on September 27 in Moncton with Dialogue Day 2021.

“When we talk about anti-racism, notions of equality, diversity, acceptance and inclusion and all those notions we celebrate, it’s not something we can do on our own,” said Duguay-Lemay.

“The business community actively needs to participate, if anything, because those topics concern them. That’s why you see so many business support the event.”

The volunteer-led non-profit organization plans to host an inclusive conversation on Monday at Moncton’s Crowne Plaza and virtually, online.

Dedicated to building social cohesion in New Brunswick, the sold-out event will feature discussions about racial justice in the workplace, rethinking the economy as it recovers from the pandemic and how to be a better ally to Indigenous people.

The event, which has sold out of in-person seats, will feature Jeremy Dutcher, a Wolastoq singer, songwriter, composer, musicologist and activist from Tobique First Nation, as its keynote speaker.

The mandate of the discussions is to ensure everyone feels heard, valued and that they belong, making diversity an asset – something Duguay-Lemay considers imperative to a functional economy.

“What I’ve found is that people don’t like to go into uncomfortable discussions. Some people want to embrace social cohesion but don’t know where to start, or are afraid of saying the wrong thing. This is our expertise – we’re good at the art of dialogue and multiple viewpoints at one table,” she said.

“We need a lot of different voices and perspectives at the table to rethink the system for the wellbeing of all. These discussions shouldn’t be happening in isolation.”

Duguay-Lemay said New Brunswick faces many economic challenges, noting a diverse workforce will help recover from those challenges.

She stressed that the business community needs to work toward a goal of truth and reconciliation, and in a call with Huddle, rebutted the metaphor of everyone being on the same boat during the pandemic.

“I’d argue we’re all facing the same storm, but not in the same boat. Some people are in yachts and some are in little boats about to capsize,” she said.

Other voices are emerging – female and Indigenous, for example – looking to address poverty and wage inequality and unfairness, employment access, systemic racism and environmental degradation, noted Duguay-Lemay, adding that the province’s 4,418 non-profits need more recognition as an economic partner.

“Inclusion is embedded in our DNA as Canadians. We’re already a country and province that abides by those laws, so it’s important to look at inclusion,” she said.

The conversations will also focus on racial justice in the workplace, how the pandemic hurt Indigenous and black Canadian employment, versus non-minorities, access to employment – and the social barriers that exist for racialized workers.

“I invite all organizations, employers, public and non-profits to look at their practices in place and ask if they walk the talk for truth and reconciliation. We’re all treaty people – how do we uphold this?” said Duguay-Lemay.

“We want to at least demonstrate to Indigenous people in New Brunswick that we hear their plight and are serious about truth and reconciliation.”

Greater social cohesion is the best step forward, Duguay-Lemay noted, adding that real dialogue can build an economy that works for everyone.

She said matters of racial justice in the workplace – and specific matters, such as owners objecting to the declaration of September 30 as a statutory holiday, contending that they can’t afford it – will be among the economic issues for which solutions will be sought.

The conversation will also focus on how the province’s recovery from the pandemic has exposed inequalities in the economy.

Duguay-Lemay stressed the need to learn from the way the pandemic exposed inequalities, and rethink a system that works for everyone.

“We need to think differently and it really shouldn’t be based on the interests of the privileged,” said Duguay-Lemay.

“As employers are looking to attract and retain talent, we hear about skill shortages all the time. This becomes a matter of attracting talent, whether from newcomers or tapping into Indigenous communities, how can we make our workplaces more equitable and inclusive?

The event will feature an “eclectic” round table of specialists, artists, activists and experts from numerous sectors, and identities in New Brunswick, with opportunities for networking, inspiration for change with concrete examples and skills to help become a social leader.

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