Is the economy getting better? Is it getting worse? It’s hard to tell.
A sunnier view of the economy — in the midst of a pandemic, mind you — seemed to be evident in recent reports on U.S. retail sales, consumer confidence and small-business optimism.
Retail sales surged 1.9% in September while closely followed surveys of consumer sentiment and small-business optimism both climbed to fresh pandemic highs.
Yet a surprise increase in jobless claims for the first time in seven weeks raised alarms about whether the number of people returning to work has slowed to a trickle. A number of large companies including Disney
recently announced widespread layoffs.
“There are certainly cross currents in the data,” said Sam Bullard, senior economist at Wells Fargo in Charlotte, N.C.
Many Wall Street
economists contend the U.S. is on the cusp of another relapse in growth. They point to rising layoffs, another resurgence in the coronavirus and the expiration of emergency federal benefits for the unemployed and struggling businesses.
Yet the increase in retail sales in September and rising business and consumer confidence tell a different story, a smaller group of economists contend.
They point to a high level of savings, loosening state restrictions and gradual increase in the number of people going back to work to support their view that the recovery is still on track.
“The September retail sales data offered yet another sign that the pervasive gloom of economists and analysts has been misplaced,” wrote chief economist Stephen Stanley of Amherst Pierpont Securities.
The upcoming week, unfortunately, won’t shed much light on which argument holds more sway. The focus once again will be on initial U.S. jobless claims, an early indicator about the health of the labor market.
The weekly U.S. claims report, however, has become less reliable lately because of a information lockdown in California. The state has not submitted new claims data to the U.S. Labor Department for three weeks while it tries to address fraud and other widespread problems.
There’s no doubt hiring has slowed, however. Job gains in the monthly employment report from the U.S. Labor Department have declined for three straight months, leaving about half of the more than 22 million people who lost their jobs early in the pandemic still out of work.
The onset of cooler weather, what’s more, could act as another drag.
Restaurants, for example, won’t be able to seat diners outside in much of the country as winter approaches. The virus might also speed up as coronaviruses often do, triggering new restrictions on business and the movement of people.
On the brighter side, historically low interest rates have spawned a boom in house sales, mortgage refinancing and auto refinancings.
Millions of people have taken advantage of extremely low rates to reduce their debt and lower monthly payments, leaving them more money to spend on home furnishings and other goods.
Indeed, the evidence strongly suggests consumers have poured more money into new cars, electronics and other goods since they are spending so little on services such as travel and entertainment.
Whether that will be enough to power the economy through the colder months without another major fiscal stimulus from Congress remains to be seen. It all depends, economists agree, on how quickly the virus spreads and whether a treatment is found soon.
“How the virus tracks will greatly determine the path of economic activity going forward,” Wells Fargo’s Bullard noted.
Amid Pandemic, Here's What Researchers Have Learned About The Economy – NPR
Editor’s note: This is an excerpt of Planet Money‘s newsletter. You can sign up here.
COVID-19 has been a massive disaster. But it has also been like a massive natural experiment. During the last nine months, we’ve learned a lot about the coronavirus, its economic effects and effective interventions to help manage the pain of another wave. So we decided to sum up some of the economic research.
Poverty … fell?
In April, the unemployment rate hit 14.7% — the most disastrous figure since the Great Depression. Over 20 million Americans had lost their jobs or been furloughed. And yet something crazy happened — the national poverty rate actually declined.
That’s one of the findings of a study by economists Jeehoon Han, Bruce D. Meyer and James X. Sullivan, who crunched data from the Census Bureau about income and poverty during the coronavirus pandemic. They found that the poverty rate fell from 10.9% in January and February to 9.4% in April, May and June. They credit the decline to government action, especially with the CARES Act, which massively increased unemployment benefits and sent large checks to middle- and low-income Americans. Had the government not done this, they found, poverty would have risen over 2.5 percentage points.
Since the expiration of some of the federal government’s assistance this summer, the poverty rate has been ticking back up, erasing the decline during the first phase of the pandemic.
The mighty are getting mightier
A few months ago, we published a newsletter that explained why the crisis was making powerful corporations even more powerful. As consumers sheltered in place, they cut spending at small businesses and shifted more spending online — benefiting megacorporations like Amazon. On top of that, the government seemed to be buttressing big corporations while leaving many small and midsize businesses scrambling. But another factor has been playing in the big guys’ favor: recruiting opportunities.
Economists Shai Bernstein, Richard R. Townsend and Ting Xu analyzed data from AngelList Talent, a job search site for tech and startup jobs, to see how the pandemic has affected job searches. They found that “job seekers shifted their searches toward larger firms and away from early-stage ventures” and were more open to lower salaries and a broader range of positions. When it comes to recruiting talent, they found, this shift has benefited large, more established companies while hurting smaller upstarts. They conclude that this “flight to safety” of qualified job seekers during the downturn has hurt entrepreneurship and competition.
According to Gallup, back in April, a jaw-dropping 51% of workers reported they were “always” working remotely. A cool study by Steve Cicala shows how this could be seen in electricity use, with commercial and industrial buildings — where we have traditionally worked — using between 12% and 14% less electricity than they would have during normal times and residential buildings using an average of 10% more.
But the remote-work wave is already receding. Gallup’s most recent survey, from mid-September, found the share of people who report “always” working remotely has shrunk to 33%. Expect power bills at office parks and skyscrapers to start climbing.
COVID-19 is changing minds
Economists Alex Rees-Jones, John D’Attoma, Amedeo Piolatto and Luca Salvadori conducted a survey of over 2,500 Americans to see how COVID-19 has affected their opinions of government programs. They found “real and perceived exposure to the consequences of COVID-19 strongly predict support for long-term expansions to unemployment insurance and government-provided healthcare.” This is true, they found, even when controlling for people’s political beliefs and demographic characteristics. Rees-Jones says, “Compared to the average survey respondent, a respondent facing a very large number of county deaths (more than 95% of other respondents) is 6.3 percentage points more likely to support long-term expansions to unemployment insurance and 5.8 percentage points more likely to support long-term expansions to government-provided healthcare.” In short, it seems that COVID-19 has increased political support for bigger government.
PPP didn’t work — or did it?
The Paycheck Protection Program was the federal government’s big effort to save small businesses. It provided grants and loans to help them survive the pandemic. Economists are still debating whether PPP was effective. Some studies, including one by Raj Chetty, John N. Friedman, Nathaniel Hendren and Michael Stepner and another by Christopher Neilson, John Eric Humphries and Gabriel Ulyssea, found little or no evidence that the program helped save jobs at small businesses. Others, including one by Robert P. Bartlett III and Adair Morse and another by Alexander W. Bartik, Zoe B. Cullen, Edward L. Glaeser, Michael Luca, Christopher T. Stanton and Adi Sunderam, found that the program helped increase the probability that small businesses would survive the pandemic. This debate over the effectiveness of PPP in saving small businesses and jobs matters because it should inform what relief package comes next, if any.
Motorcycles can be dangerous
In early-to-mid August, almost half a million motorcyclists congregated in Sturgis, S.D., for an annual motorcycle event. It offered economists Dhaval M. Dave, Andrew I. Friedson, Drew McNichols and Joseph J. Sabia the opportunity to see the effects of a COVID-19 superspreader event.
The researchers used data from cellphones to measure the movement of people, along with data from the Centers for Disease Control and Prevention to measure the spread of the coronavirus. They found that by Sept. 2, about a month after the rally began, COVID-19 cases increased by approximately six to seven cases per 1,000 people in the county where the event was held. Meanwhile, they found that “counties that contributed the highest inflows of rally attendees experienced a 7.0 to 12.5 percent increase in COVID-19 cases relative to counties that did not contribute inflows.” Not everyone buys it. Researchers at Johns Hopkins University have criticized this study’s design, arguing that its findings should be “interpreted cautiously.”
Did you enjoy this newsletter segment? Well, it looks even better in your inbox! You can sign up here.
Are more steps needed to help the economy recover? – News 1130
Skills for the new economy – The Globe and Mail
Event summary produced by The Globe and Mail Events team. The Globe’s editorial department was not involved.
As the digital transformation gains velocity though the pandemic, business leaders are assessing the skills most essential for future-ready workforces. The Globe and Mail hosted a webcast on October 13 to bring business and academic leaders together to discuss the knowledge employees will need to succeed in the shifting economy. The webcast was presented with support from Athabasca University. Sean Stanleigh, head of The Content Studio at The Globe and Mail, moderated the panel discussion.
Highlights from the discussion appear below the webcast recording.
Highlights from the discussion:
1). The nature of work is changing
Much of the work we currently do is process or task focused but that will change with the development of technologies such as artificial intelligence (A.I.), said Joe Cox, Canada research chair in digital disruption and organizational transformation with Athabasca University. With A.I. in the picture, they will shift their focus to figuring out the business problems that need solving and how best to pose these problems to the technology systems. The role of managers will also change, he added, skewing away from their current priority of predicting what will happen in the future, to making good judgements.
2). Training is vital for success
The digital economy requires individuals who have specific technology skills, especially in the area of cybersecurity, said Claudette McGowan, global executive officer for cybersecurity with TD Bank. She pointed out the skills shortfall in cybersecurity and noted it could be a good opportunity for mid-career individuals to pivot into a growing field by taking training at an academic institution or privately. She said reverse mentorships are also valuable, providing an opportunity for more senior staff to shore up their skills in emerging technologies, social media and data analytics.
3). Soft skills and micro-skills will dominate
Nicole Verkindt is a tech entrepreneur and founder of OMX, a procurement technology company. She said new hires at OMX fall into two camps. The first relates to soft skills, including judgement ability, in order to interpret data from technology programs. Diversity of backgrounds and experiences is also important. The second area relates to specific skills. In the past, an undergrad degree in business might be sufficient to achieve a job in marketing, for example. Increasingly, however, she is looking for candidates with niche skills, such as experience with HubSpot or data analytics tools. An entrepreneurial mindset is also highly valued, she added.
Watch the full webcast above for specific examples of the knowledge, experience and skills of most importance for success in the digital economy.
Manitoba seeking nurses, health-care aides, contact tracers in fight against COVID-19 – CBC.ca
iPhone 12 Pro Max Has Smaller 3,687 mAh Battery According to Regulatory Filing
Alberta medical experts call for mandatory COVID-19 restrictions based on hospitalization numbers – CBC.ca
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Richmond BBQ spot speaks out about coronavirus rumours Vancouver Is Awesome
- Politics21 hours ago
The Real Divide in America Is Between Political Junkies and Everyone Else – The New York Times
- Health18 hours ago
Calgary ‘superspreader’ wedding responsible for at least 49 cases of COVID-19
- Media20 hours ago
Media production company settles in Squamish – Squamish Chief
- Politics24 hours ago
La Loche Mayor Robert St. Pierre retires from politics – Saskatoon StarPhoenix
- Media17 hours ago
'Hunter's emails' are 2020's 'Hillary's emails.' But this time, the media isn't taking the bait. – Poynter
- Business21 hours ago
What it's like to pull the plug on your business during the pandemic – CBC.ca
- Tech20 hours ago
New Photos Offer Better Look at iPhone 12 Color Options – MacRumors
- News15 hours ago
COMMENTARY: In one of Canada’s most beautiful cities, an ugly underside vexes politicians – Global News