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Trump orders U.S. meat-processing plants to stay open despite coronavirus fears – CBC.ca

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U.S. President Donald Trump ordered meat-processing plants to stay open on Tuesday to protect the food supply in the United States, despite concerns about coronavirus outbreaks, drawing a backlash from unions that said at-risk workers required more protection.

With concerns about food shortages and supply chain disruptions, Trump issued an executive order using the Defense Production Act to mandate that the plants continue to function. The order is designed in part to give companies legal cover with more liability protection in case employees catch the virus as a result of having to go to work.

The world’s biggest meat companies, including Smithfield Foods Inc., Cargill Inc., JBS USA and Tyson, have halted operations at about 20 slaughterhouses and processing plants in North America as workers fall ill, stoking global fears of a meat shortage.

In Canada, an Alberta meat-processing plant is now the site of the country’s largest outbreak. More than 1,300 cases are linked to two plants, Cargill and JBS in southern Alberta, which together supply about two-thirds of Canada’s beef.

John H. Tyson, chairman of Tyson Foods, said on Sunday that the food supply chain was “breaking” and warned of the potential for meat shortages.

Before issuing the executive order, Trump told reporters in the Oval Office that signing the order, .”.. will solve any liability problems,” adding, “And we always work with the farmers. There’s plenty of supply.”

A Tyson Fresh Meats plant in Emporia, Kan. U.S. President Donald Trump ordered meat-processing plants to stay open on Tuesday to protect the food supply in the United States, despite concerns about coronavirus outbreaks (Charlie Riedel/The Associated Press)

A senior administration official said the U.S. government would also provide guidance to minimize risk to workers who are especially vulnerable to the virus, such as encouraging older workers and those with other chronic health issues to stay home.

UFCW, the largest U.S. meat-packing union, demanded that the administration compel meat companies to provide “the highest level of protective equipment” to slaughterhouse workers and ensure daily coronavirus testing.

20 U.S. workers have died, says union

U.S. meat companies slaughtered an estimated 283,000 hogs on Tuesday, down about 43 per ccent from before plants began shutting because of the pandemic, according to U.S. Department of Agriculture data. Processors slaughtered about 76,000 cattle, down about 38 per cent.

Critics of Trump’s order made clear that plants were being shut down for a reason.

“When poultry plants shut down, it’s for deep cleaning and to save workers’ lives. If the administration had developed meaningful safety requirements early on as they should have and still must do, this would not even have become an issue,” Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, said in a statement.

More than 6,500 meat- and food-processing workers in the U.S. have been infected with or exposed to the new coronavirus, and 20 have died, the UFCW said on Tuesday.

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OPEC+ extends oil cuts in deal that hinges on end of cheating – BNNBloomberg.ca

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OPEC+ agreed to a one-month extension of its record output cuts and adopted a stricter approach to ensuring members don’t break their production pledges.

The deal will underpin the oil market recovery, easing the financial pain felt by resource-dependent emerging economies, shale explorers in Texas, and blue-chip companies like Royal Dutch Shell Plc.

It’s a victory for Saudi Arabia and Russia, who put a destructive price war behind them to successfully cajole Iraq, Nigeria and other laggards to fulfill their promises to cut production. The two leaders of OPEC+ showed that they intend to keep a close watch on the oil market, meeting every month to assess the balance between supply and demand amid an uncertain economic recovery from the global pandemic.

“Our collective efforts have borne fruit, and despite many uncertainties, there are encouraging signs that we are over the worst,” said Saudi Energy Minister Prince Abdulaziz bin Salman. “Demand is returning as big oil-consuming economies emerge from pandemic lockdown,” he added.

After a video conference lasting several hours on Saturday, delegates said all nations had signed off on a new deal for a production cut of 9.6 million barrels a day next month. That’s 100,000 barrels a day lower than the reduction in June because Mexico will end its supply constraints, but a tighter limit than the 7.7 million barrels a day set for July in the group’s previous agreement.

In addition, the communique states that any member that doesn’t implement 100 per cent of its production cuts in May and June will make extra reductions from July to September to compensate for their failings.

Those promises are a particular vindication for the Saudi minister, who has consistently pushed fellow members to stop cheating on their quotas since his appointment last year.

But they could also add an element of risk. In theory, the entirety of the 23-nation production agreement, which runs until April 2022, is now contingent on every member making 100 per cent of their pledged cuts, according to the communique. That’s something rarely achieved in the three-and-a-half years that OPEC+ has existed, or indeed the decades-long history of the Organization of Petroleum Exporting Countries itself.

Daunting Challenge

Oil has just posted a sixth weekly gain in London, more than doubling to US$42.30 a barrel since April with traders anticipating tighter supplies as demand recovers from lockdown. U.S. President Donald Trump on Friday hailed the cuts from OPEC and its allies for saving America’s energy industry, and U.S. Energy Secretary Dan Brouillette welcomed the deal on Saturday.

The oil market “is still in a fragile state and needs support,” Russia’s Energy Minister Alexander Novak said in opening remarks at the virtual meeting. “That is why today more than ever it is important to adhere to 100 per cent compliance.”

The group hopes to build on its success by pushing the market into a supply deficit next month, using a price structure called backwardation to start to chip away at the billion barrels of oil stockpiles that built up during the pandemic.

There was no discussion in the meeting about the future of the additional 1.2 million barrels a day of voluntary output cuts being implemented by Saudi Arabia and its Gulf allies in June, delegates said.

The cartel will meet again in the second half of June for another review of the oil market. Talks are scheduled on June 18 for the Joint Ministerial Monitoring Committee, which could recommend a further extension if it’s deemed necessary, pushing the deep production cuts into August, a delegate said. That panel will meet every month until December, according to the communique.

The next full ministerial OPEC+ meeting has been scheduled for Nov. 30 to Dec. 1, delegates said, although the communique notes that a conference could be held whenever it is required.

Embedded Image

Cutting production is always painful for oil-dependent states. Iraq in particular needs every penny because it’s still rebuilding its economy following decades of war, sanctions and Islamist insurgency.

The country made less than half of its assigned cutbacks last month, so compensating fully would require it to slash production by a further 24 per cent to about 3.28 million barrels a day, according to Bloomberg calculations. Accepting such terms could risk a backlash from Iraqi parliamentarians and rival political parties for bowing to foreign pressure.

The traditional shirkers in OPEC+ have promised many times before to do better. Some analysts were skeptical that this occasion will be any different.

“Everyone saves face with this agreement,” Jan Stuart, global energy economist at Cornerstone Macro LLC, said on Friday after a tentative deal was in place. “But it begs the question: What is the enforcement mechanism? I’m very curious to see how the organization is going to elicit greater compliance from the cheaters.”

There’s also a risk that future OPEC+ curbs could be undermined by a return of Libyan oil. The civil war there halted more than one million barrels a day of production, helping OPEC+ rebalance the market, but a cease fire now opens the door for a gradual recovery of supply.

For now at least, members of OPEC+ can enjoy the price gains resulting from their deal.

“The oil market is on its way to recovery,” said Ann-Louise Hittle, oil analyst at consultant Wood Mackenzie Ltd. “Supply has shifted dramatically already”

–With assistance from Julian Lee and Khalid Al-Ansary.

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Optimistic U.S. unemployment figures under-reported due to misclassifications – CBC.ca

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U.S. unemployment dropped unexpectedly in May to 13.3 per cent as reopened businesses began recalling millions of workers faster than economists had predicted. But the Labour Department for the second straight month acknowledged making errors in counting the unemployed during the coronavirus outbreak, saying the real figure is worse than the numbers indicate.

Economists had expected the rate to approach 20 per cent, driven up from 14.7 per cent by job losses topping eight million. Their forecasts woefully missed the mark. Part of the explanation is the difficulty of assessing data when the situation is changing so quickly.

But it also reflects an acknowledged difficulties by the Labour Department’s Bureau of Labour Statistics in its information gathering. Millions of people appeared to be erroneously classified by the survey as not working but employed. These people should have been classified as on temporary layoff and therefore unemployed. Had they been counted correctly, the jobless rate would have been roughly three points higher — 16 per cent, the government said.

The same issue marred the April jobs report. In that case, the unemployment rate would have been roughly five points higher than the 14.7 per cent reported.

The jobs report is drawn from a pair of surveys. A survey of households establishes the unemployment rate. A separate survey of employers determines how many jobs were added or lost. Response rates for these surveys were lower than usual in May because of the viral outbreak. But the government still gathered enough responses to produce the jobs report.

People wait in line for help with unemployment benefits in Las Vegas on March 17. (John Locher/The Associated Press)

“The household survey response rate, at 67 per cent, was about 15 percentage points lower than in months prior to the pandemic,” the report said.

The Labour Department also includes a broader measure of unemployment. This measure includes not only people who are out of work and looking for a job but also people who stopped looking or who were reduced to part-time hours. That rate was 21.2 per cent in May.

2.5 million jobs added

Still, after weeks of dire predictions by economists that unemployment in May could hit 20 per cent or more, the news that the economy added a surprising 2.5 million jobs last month is evidence that the employment collapse most likely bottomed out in April.

At the same time, economists warn that after an initial burst of hiring as businesses reopen, the recovery could slow in the fall or early next year unless most Americans are confident they can shop, travel, eat out and fully return to their other spending habits without fear of contracting the virus.

A person wearing a mask walks past a sign seeking potential hires at a pharmacy in San Francisco on May 7. (Jeff Chiu/The Associated Press)

“We are witnessing the easiest phase of growth as people come off temporary layoffs and come back to their employers,” said Jason Furman, a Harvard economist and former top adviser in the Obama White House. “And once employers are done recalling people, the much harder, longer work of recovery will have to proceed.”

An exultant U.S. President Donald Trump seized on the report as evidence that the economy is going to come back from the coronavirus crisis like a “rocket ship.”

“This shows that what we’ve been doing is right,” said the president, who has pushed governors aggressively to reopen their economies amid warnings from public health officials that the country is risking a second wave of infections on top of the one that has killed over 100,000 Americans.

Nearly all industries added jobs last month, a sharp reversal from April, when almost all cut them. Hotels and restaurants added 1.2 million jobs in May, after shedding 7.5 million. Retailers gained 368,000, after losing nearly 2.3 million in the previous month. Construction companies added 464,000 after cutting 995,000.

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OPEC+ agrees to extend output cuts as cheats offer penance – BNNBloomberg.ca

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OPEC+ agreed to a one-month extension of its record output cuts and adopted more stringent methods to ensure members don’t break their production pledges.

The deal is a victory for Saudi Arabia and Russia, who spent a week cajoling Iraq, Nigeria and other laggards to fulfill their obligations. It’s a particular vindication for the kingdom’s Energy Minister Prince Abdulaziz bin Salman, who has consistently pushed fellow members to stop cheating on their quotas since his appointment last year.

With the cartel’s video conference now under way, delegates said all nations have agreed to the new deal. The group will maintain its production cut of 9.7 million barrels a day to the end of July, instead of easing it to 7.7 million after this month as planned.

In addition, the meeting’s draft communique states that any member that doesn’t implement 100 per cent of its production cuts in May and June will make extra reductions from July to September to compensate for their failings.

Oil has just posted a sixth weekly gain in London, more than doubling to US$42.30 a barrel since April as traders anticipate tighter supplies as demand recovers from the coronavirus lockdowns. U.S. President Donald Trump on Friday hailed the cuts from the Organization of Petroleum Exporting Countries and its allies for saving the American energy industry.

Daunting Challenge

“Despite the progress achieved to date, we cannot afford to rest on our laurels,” Mohamed Arkab, Algeria’s energy minister and current OPEC president, said at the start of the meeting. “The challenge that we face remains daunting.”

The group hopes to build on its success by pushing the market into a supply deficit next month, using a price structure called backwardation to start to chip away at the billion barrels of oil stockpiles that built up during the pandemic.

The cartel will meet again in the second half of June for another review of the oil market. Talks are scheduled on June 18 for the Joint Ministerial Monitoring Committee, which could recommend a further extension if it’s deemed necessary, pushing the deep production cuts into August, a delegate said. The panel will meet every month until December, according to the draft communique.

Embedded Image

Cutting production is always painful for oil-dependent states. Iraq in particular needs every penny because it’s still rebuilding its economy following decades of war, sanctions and Islamist insurgency.

Iraq made less than half of its assigned cutbacks last month, so compensating fully would require it to slash production by a further 24 per cent to about 3.28 million barrels a day, according to Bloomberg calculations. Accepting such terms could risk a backlash from Iraqi parliamentarians and rival political parties for bowing to foreign pressure.

The traditional shirkers in OPEC+ have promised many times before to do better. Some analysts were skeptical that this occasion will be any different.

“Everyone saves face with this agreement,” Jan Stuart, global energy economist at Cornerstone Macro LLC, said on Friday after a tentative deal was in place. “But it begs the question: What is the enforcement mechanism? I’m very curious to see how the organization is going to elicit greater compliance from the cheaters.”

There’s also a risk that future OPEC+ curbs could be undermined by a return of Libyan oil. The civil war there halted more than 1 million barrels a day of production, helping OPEC+ rebalance the market, but a cease fire now opens the door for a gradual recovery of supply.

For now at least, members of OPEC+ can enjoy the price gains resulting from their deal. The recovery has eased pressure on the budgets of oil-rich nations, while also reviving the fortunes of energy companies from Exxon Mobil Corp. to shale drillers such as Parsley Energy Inc.

“The oil market is on its way to recovery. Supply has shifted dramatically already,” said Ann-Louise Hittle, oil analyst at consultant Wood Mackenzie Ltd. “At the same time, global demand is recovering with both May and June climbing from the low seen in April as the coronavirus-related shutdowns continue to ease.”

–With assistance from Julian Lee and Khalid Al-Ansary.

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