Anxious to spur an economic recovery without risking lives, U.S. President Donald Trump insists that “you can satisfy both” — see states gradually lift lockdowns while also protecting people from the coronavirus pandemic that has killed more than 67,000 Americans.
The president, fielding questions from Americans Sunday night in a virtual town hall from the Lincoln Memorial, acknowledged valid fears on both sides of the issue. Some people are worried about getting sick; others are reeling from lost jobs and livelihoods.
Trump increased his projection for the total U.S. death toll to as many as 100,000 — up by as much as 40,000 from what he had suggested just a few weeks ago.
“Look, we’re going to lose anywhere from 75,000, 80,000 to 100,000 people,” Trump said. “That’s a horrible thing. We shouldn’t lose one person out of this. This should have been stopped in China.”
But he struck a note of urgency to restart the nation’s economy, declaring, “We have to get it back open safely but as quickly as possible.”
After more than a month of being cooped up at the White House, Trump returned from a weekend at the Camp David presidential retreat in Maryland for the virtual town hall hosted by Fox News Channel.
The president said of his monumental backdrop: “We never had a more beautiful set than this.”
As concerns mount about his reelection bid, Trump stuck to his relentlessly optimistic view of the nation’s ability to rebound soon.
“It is all working out,” Trump said. “It is horrible to go through, but it is working out.”
Many public health experts believe the nation cannot safely reopen fully until a vaccine is developed. Trump declared Sunday that he believed one could be available by year’s end.
U.S. public health officials have said a vaccine is probably a year to 18 months away. But Dr. Anthony Fauci, the nation’s leading expert on infectious diseases and member of the White House coronavirus task force, said in late April that it is conceivable, if a vaccine is soon developed, that it could be in wide distribution as early as January.
Though the administration’s handling of the pandemic, particularly its ability to conduct widespread testing, has come under fierce scrutiny, the president tried to shift the blame to China and said the U.S. was ready to begin reopening.
“I’ll tell you one thing. We did the right thing and I really believe we saved a million and a half lives,” the president said. But he also broke with the assessment of his senior adviser and son-in-law, Jared Kushner, saying it was “too soon to say” the federal government had overseen a “success story.”
While noting that states would go at their own pace in returning to normal, with ones harder hit by the coronavirus going slower, Trump said that “some states, frankly, I think aren’t going fast enough.” He singled out Virginia, which has a Democratic governor and legislature. And he urged the nation’s schools and universities to return to classes this fall.
Federal guidelines that encouraged people to stay at home and practice social distancing expired late last week.
Debate continued over moves by governors to start reopening state economies that tanked after shopping malls, salons and other nonessential businesses were ordered closed in attempt to slow a virus that has killed more than 66,000 Americans, according to a tally of reported deaths by Johns Hopkins University.
The U.S. economy has suffered, shrinking at a 4.8% annual rate from January through March, the government estimated last week. And roughly 30.3 million people have filed for unemployment aid in the six weeks since the outbreak forced employers to shut down and slash their workforces.
The president’s advisers have nervously watched Trump’s support slip in a number of battleground states and he was told last month that if the election were held that day, he would lose to Democrat Joe Biden. The president’s aides believe restarting the economy, even with its health risks, is essential to a victory in November and are pushing for him to pivot away from discussions about the pandemic and onto an American comeback story.
To that end, Trump will begin travelling again, with a trip to a mask factory in Arizona planned for Tuesday. The president also is set to speak in June at commencement for the U.S. Military Academy at West Point. Returning to campus for commencement will require graduates to self-isolate for 14 days, but Trump insisted the event poses no risk to the cadets.
The town hall, which included an appearance by Vice-President Mike Pence, included a rare mea culpa: The vice-president said he should have worn a face mask during a visit last week to Minnesota’s Mayo Clinic. Pence’s failure to wear a mask violated the clinic’s guidelines and drew significant criticism.
Elsewhere in Washington, the Senate planned to reopen Monday, despite the area’s continued status as a virus hot spot and with the region still under stay-at-home orders. The House remains shuttered as debate continues on what the next stage of the economic recovery may look like.
State and local governments are seeking up to $1 trillion in coronavirus costs, which has been met with some objections by congressional Republicans.
Trump said that while he thought common ground could be found with Democrats over an infrastructure package, “we’re not doing anything unless we get a payroll tax cut. That is so important to the success of our country.”
The leaders of California and Michigan are among governors under public pressure over lockdowns still in effect while states such as Florida, Georgia and Ohio are reopening.
Trump on Sunday night singled out Michigan Gov. Gretchen Whitmer and Washington Gov. Jay Inslee, also a Democrat, for criticism even as he praised the federal co-ordination with most governors. He also complained that some Democrats would rather “people get sick” than given him any credit for pushing the use of a malaria drug for treating COVID-19, though it has not been proven to be safe and effective for that use.
Lemire reported from New York
Canadian regulator lifts banks’ capital buffer to record, priming for post-pandemic world
Canada‘s financial regulator raised the amount of capital the country’s biggest lenders must hold to guard against risks to a record 2.5% of risk-weighted assets, from 1% currently, in a surprise move that could pave the way for them to resume dividend increases and share buybacks.
The new measures, which take effect on Oct. 31, is a sign that the economic and market disruptions stemming from the coronavirus pandemic have abated and banks’ capital levels have been resilient, the Office of the Superintendent of Financial Institutions (OSFI) said in a statement.
But the regulator acknowledged that key vulnerabilities, including household and corporate debt levels, as well as asset imbalances caused by steep increase in home prices over the past year, remain.
In a sign of concern about the housing market, OSFI and the Canadian government raised the benchmark to determine the minimum qualifying rate for mortgages, starting June 1.
The increase in the Domestic Stability Buffer (DSB) to the highest possible level raises the Common Equity Tier 1 (CET1) capital – the core bank capital measure – to 10.5% of risk-weighted assets; a 4.5% base level, a “capital conservation buffer” of 2.5%, and a 1% surcharge for systemically important banks, plus the DSB.
The change “gives OSFI more leeway to loosen a restriction down the road, namely the freeze on buybacks and dividend increases,” National Bank Financial Analyst Gabriel Dechaine said.
OSFI felt it was “useful for the banks to understand what our minimal capital expectations are and to give them time to adjust to that… ahead of any lifting of the temporary capital distribution restrictions,” Assistant Superintendent Jamey Hubbs said on a media call.
Even with the higher requirement, Canada‘s six biggest banks would have excess capital of about C$51 billion, dropping from C$82 billion as of April 30, according to Reuters calculations.
That was driven in part by a moratorium on dividend increases and share buybacks imposed by OSFI in March 2020, although a pandemic-driven surge in loan losses has so far failed to materialize.
The Canadian banks index slipped 0.25% in morning trading in Toronto, while the Toronto stock benchmark fell 0.1%.
The increase is the first since the last one announced in December 2019, which did not come into effect as planned in April 2020, as OSFI made an out-of-schedule change https://www.reuters.com/article/canada-mortgages-regulation-idUSL1N2B636J that dropped the rate to 1% in March. It has maintained that level at its twice yearly reviews.
Prior to that, OSFI had raised the required level by 25 basis points at every twice yearly review since it was introduced at 1.5% in June 2018.
($1 = 1.2326 Canadian dollars)
(Reporting By Nichola Saminather; Editing by Marguerita Choy and Jonathan Oatis)
Canada Economic Indicators
The economic indicators used to gauge the performance of an economy and its outlook are the same across most nations. What differs is the relative importance of certain indicators to a specific economy at various points in time (for instance, housing indicators are closely watched when the housing market is booming or slumping), and the bodies or organizations compiling and disseminating these indicators in each nation.
Here are the 12 key economic indicators for Canada, the world’s 10th-largest economy:1
Statistics Canada, a national agency, publishes growth statistics on the Canadian economy on monthly and quarterly bases. The report shows the real gross domestic product (GDP) for the overall economy and broken down by industry. It is an accurate monthly/quarterly status report on the Canadian economy and each industry within it.2
Employment Change and Unemployment
Key data on the Canadian employment market, such as the net change in employment, the unemployment rate, and participation rate, is contained in the monthly Labour Force Survey, released by Statistics Canada. The report contains a wealth of information about the Canadian job market, categorized by the demographic, class of worker (private sector employee, public sector employee, self-employed), industry, and province.3
Consumer Price Index
Statistics Canada releases a monthly report on the consumer price index (CPI) that measures inflation at the consumer level. The index is constructed by comparing changes over time in a fixed basket of goods and services purchased by consumers. The report shows the change in CPI monthly and over the past 12 months, on an overall and core (excluding food and energy prices) basis.4
International Merchandise Trade
This monthly report from Statistics Canada shows the nation’s imports and exports, as well as the net merchandise trade surplus or deficit. The report also compares the most current data with that for the preceding month. Exports and imports are shown by product category, and also for Canada’s top ten trading partners.5
Teranet – National Bank House Price Index
This composite index of house prices across Canada was developed by Teranet and the National Bank of Canada and represents average home prices in Canada’s six largest metropolitan areas. A monthly report shows the change in the index monthly and over the past 12 months, as well as monthly and 12-month changes in Canada’s six and 11 largest metropolitan areas.6
RBC Manufacturing Purchasing Managers’ Index – PMI
Released on the first business day of each month, this indicator of trends in the Canadian manufacturing sector was launched in June 2011 by Royal Bank of Canada, in association with Markit and the Purchasing Management Association of Canada. RBC PMI readings above 50 signal expansion as compared to the previous month, while readings below 50 signal contraction. The monthly survey also tracks other information pertinent to the manufacturing sector, such as changes in output, new orders, employment, inventories, prices, and supplier delivery times.7
The Conference Board’s Consumer Confidence Index
The Conference Board of Canada’s Index of Consumer Confidence measures consumers’ levels of optimism in the state of the economy. It is a crucial indicator of near-term sales for consumer product companies in Canada, as well as an indicator of the outlook for the broad economy since consumer demand comprises such a significant part of it. The index is constructed on the basis of responses to four questions by a random sampling of Canadian households. Survey participants are asked how they view their households’ current and expected financial positions, their short-term employment outlook, and whether now is a good time to make a major purchase.8
Ivey Purchasing Managers Index – PMI
An index prepared by the Ivey Business School at Western University, the Ivey PMI measures the monthly variation in economic activity, as indicated by a panel of purchasing managers across Canada. It is based on responses by these purchasing managers to a single question: “Were your purchases last month in dollars higher, the same, or lower than in the previous month?” An index reading below 50 shows a decrease; a reading above 50 shows an increase. Panel members indicate changes in their organization’s activity over five broad categories: purchases, employment, inventories, supplier deliveries, and prices.9
Canada Mortgage and Housing Corporation (CMHC) issues a monthly report on the sixth working day of every month, showing the previous month’s new residential construction activity. The data is presented by region, province, census metropolitan area, and dwelling type (single-detached or multiple-unit). The indicator is an important gauge of the state of the Canadian housing market.10
This key indicator of housing activity is compiled by the Canadian Real Estate Association (CREA) and is based on the number of home sales processed through the MLS (Multiple Listing Service) Systems of real estate boards and associations in Canada. The monthly report from the CREA shows the change in home sales across Canada, as well as for major markets, from month to month. The report also includes other important housing-related information, such as the change (as a percentage) in newly listed homes, the national sales-to-new listings ratio, months of housing inventory, the change in the MLS Home Price Index, and the national average price for homes sold within the month.11
Statistics Canada releases a monthly report on retail sales activity across Canada, with changes shown on month-over-month and year-over-year bases. The headline number shows the percentage change in national retail sales on a dollar basis; the percentage change in volume terms is also shown. The retail sales figures are shown by industry and for each province or territory, and provide insights into Canadian consumer spending.12
The building permits survey conducted monthly by Statistics Canada collects data on the value of permits issued by Canadian municipalities for residential and non-residential buildings, as well as the number of residential dwellings authorized. Since building permit issuance is one of the very first steps in the process of construction, the aggregate building permits data are very useful as a leading indicator for assessing the state of the construction industry.13
The Bottom Line
The 12 economic indicators briefly described above show the health of key aspects of Canada’s economy: consumer spending, housing, manufacturing, employment, inflation, external trade, and economic growth. Taken together, they provide a comprehensive picture of the state of the Canadian economy.
Canada adds jobs for fourth straight month in May
Canada added 101,600 jobs in May, the fourth consecutive month of gains, led by hiring in the education and health services sector as well as in professional and business services, a report from payroll services provider ADP showed on Thursday.
The April data was revised to show 101,300 jobs were gained, rather than an increase of 351,300. The report, which is derived from ADP’s payrolls data, measures the change in total nonfarm payroll employment each month on a seasonally-adjusted basis.
(Reporting by Fergal Smith; Editing by Alex Richardson)