Economy

Trump inherited a booming economy — and handed Biden a nation 'in shambles' – NBC News

Published

4 years ago

January 20, 2021

More so than other presidents, and to the endless frustration of economists, Donald Trump correlated stock market performance with the nation’s economic health. However, President Joe Biden is unlikely to measure his own achievements by the gyrations of the stock market, economic experts say — and that message is likely to resonate with an anxious population.

“I doubt Joe Biden views the stock market as a barometer of his immediate success,” said Thomas Martin, senior portfolio manager at Globalt Investments. “He is focused on the health and welfare of Americans. He will gauge success on how much he can flatten the curve, prevent deaths and get the economy back in shape.”

For much of Trump’s presidency, it was easy for him to claim credit for stock gains, since he was set up for success, economists say.

“The economy was in pretty good shape. Nothing was really out of balance,” said Dan North, chief economist for North America at Euler Hermes.

Corporate expectations of lower taxes and fewer regulations sent business optimism soaring. “It was the right environment to go up. The Biden stock market has an awful lot going against it,” North said.

The Biden stock market has an awful lot going against it.”

Last March 9 and again on March 12, as the coronavirus began to take over the country, stocks fell so far, so fast, that electronic “circuit breakers” had to be triggered to stave off a full-blown collapse. That weekend, Trump tweeted, “BIGGEST STOCK MARKET RISE IN HISTORY YESTERDAY!” while saying nothing to address, or even acknowledge, the nation’s growing economic fears. The following week, circuit breakers were again triggered on two different days as stocks continued to slide.

The CARES Act, along with aggressive action from the Federal Reserve to lower interest rates and add liquidity to the financial system, ultimately stopped the market’s fall. In the ensuing months, Wall Street recovered, while Main Street suffered.

Experts say this is just one example of why it was not only pointless, but foolhardy, for Trump to claim credit for a rising market. “In the investment business, generally speaking, we know that the things that make the stock market move are myriad and complex. It’s difficult, at best, to gauge cause and effect,” Martin said.

Despite his self-professed business acumen, Trump squandered some of the market momentum he was handed, analysts say. “He did quite a few things to really impede the progress of the stock market,” said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance. “The trade war with China was, by far, the most detrimental.”

That trade war was widely regarded as a failure: It drew to an uneasy truce in early 2020, with little gained for American consumers or businesses.

The new president, on the other hand, faces a heavier lift. “President Trump is handing Biden an economy in shambles, still down nearly 10 million jobs from its pre-pandemic peak and struggling to avoid a double-dip recession,” Moody’s Analytics Chief Economist Mark Zandi wrote in a research note earlier this week.

“Whereas you might say what Trump inherited was a ‘normal market,’ Joe Biden is inheriting a market that’s at extremes,” Martin said. “You just have a whole new ballgame for Joe Biden.”

Valuations are high, inflation is broadly low but shows pockets of escalation, and market observers say Wall Street seems to be positioned for a best-case scenario regarding Covid-19 containment and immunity. Anything that doesn’t live up to the market’s lofty expectations could trigger a reversal in investor sentiment.

“If you’re the average person, do you care if GDP was 3.2 or 3.4 percent? No, you care if you have a job.”

If the market does drop from its current highs, though, economists don’t expect Biden to respond the way his predecessor might have. Unlike Trump, Biden is more likely to focus on containing Covid-19 and getting the sputtering labor market recovery going again. “The Biden administration, I think, is going to focus more on the unemployment rate and jobs and less on what the actual stock market may do,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “Right now, our immediate problem is still the coronavirus and getting the economy reopened.”

North said: “It’s going to take a long time to get those 10 million jobs back, particularly because there’s been so much permanent business closure. That’s what I believe the administration will focus on and, honestly, should focus on.”

“If you’re the average person, do you care if GDP was 3.2 or 3.4 percent?” he said. “No, you care if you have a job.”

Martha C. White

Martha C. White is an NBC News contributor who writes about business, finance and the economy.

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

2 days ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

6 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

7 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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