With the economy looming large in the 2024 election, Treasury Secretary Janet Yellen said Thursday she sees “no reason” for a recession this year and insisted consumers are turning more optimistic about their finances.
“I think 2024 is going to be a very good economic year. That said, there are always risks,” Yellen told ABC News Correspondent Elizabeth Schulze in an exclusive interview in Chicago.
“Consumers and households feel confident enough about their own personal financial situation and about the economic outlook to be spending in a way that’s creating jobs, creating growth and is providing them with the income to go on doing that,” Yellen said. “So, I see no reason why that can’t continue.”
Treasury Secretary Janet Yellen speaks during an interview with ABC News’ Elizabeth Schulze, on Jan. 25, 2024.
ABC News
Yellen’s comments come on the back of a new GDP report showing a stellar year of economic growth that defied economists’ expectations of a recession, a point that the Biden administration is hoping it can use to alter voters’ largely pessimistic feelings about the economy ahead of the election.
“Recent surveys suggest that picture is changing. We’ve seen a massive increase, improvement in consumer sentiment,” Yellen said, referring to a closely watched consumer sentiment index from the University of Michigan that reached its highest level this month since July 2021.
Eager to capitalize on the economic optimism, Yellen and President Joe Biden both visited the Midwest Thursday. In a major speech in Chicago, Yellen pointed to the administration’s policy successes in infrastructure, manufacturing and clean energy, while just a few hours away, the president visited a new bridge construction project funded by his legislation in the key swing state of Wisconsin.
Treasury Secretary Janet Yellen speaks during an interview with ABC News’ Elizabeth Schulze, on Jan. 25, 2024.
ABC News
Yellen, not normally one to wade into the political fray, also took direct hits at former President Donald Trump, the expected Republican candidate to take on Biden.
Asked about recent comments from JP Morgan CEO Jamie Dimon indicating that businesses might welcome Trump back for his economic policies, Yellen said bluntly that Trump may have helped big companies, but he “did nothing for the middle class.”
“Wealthy corporations did very well. They saw their tax rate go from 35% to 21%. And so that was a benefit that they enjoyed,” Yellen said, attacking Trump for his signature tax cut legislation.
“It resulted in $2 trillion of additional deficits and really did absolutely nothing for the middle class that was struggling,” she said.
By contrast, she touted the successes of the Biden administration’s investments that brought the country back from the brink of economic hardship post-pandemic in “the fairest recovery on record.”
But Yellen acknowledged the Biden administration has more work to do on its goal of boosting the middle class, referring to high costs for child care, food and housing.
“Apartment rents, food are maybe 20% higher than they were before the pandemic. And I think that’s something that influences sentiment,” she said.
“But what’s happening for more than a year now, and I expect this to continue, is wages are rising more rapidly than prices. Price increases have now just about normalized and wages continue to increase. And Americans are getting ahead and they see their financial situation improving,” she said.
She also drew a sharp contrast with her generation growing up, admitting the American dream is now harder to achieve.
In a recent ABC News/Ipsos poll, only 27% of respondents said the American dream still holds, down sharply from 50% when the question first was asked in 2010.
“When I was growing up, 80 or 90% of people in my generation did better than their parents did. And those numbers have dropped substantially. And that’s what the American dream is about,” Yellen said.
“There are parts of the country that have really not seen much economic progress,” she said. “That’s something that has to change for that feeling that the American dream is alive and well.”
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.
