The U.S. economy added 245,000 jobs in November, as the unemployment rate fell to 6.7 percent, according to data released Friday by the Bureau of Labor Statistics. Economists had predicted the economy would gain around 440,000 jobs.
Amid a fresh surge in coronavirus cases and a new round of shutdowns, Friday’s figure represents the fifth straight month of decelerating job gains. It is by far the lowest monthly total since the economy started its halting recovery.
“Today’s report is both a wakeup call and a warning,” said Nick Bunker, Indeed economic research director. “Coronavirus cases are surging throughout the country and several federal relief programs are set to expire this month. Progress in the labor market has slowed at the worst possible time. We might be optimistic about the spring, but the winter could bring another round of economic pain.”
BLS unemployment data is collected on or around the 12th of the month, but more recent metrics underscore how vulnerable the economy is to a “super-surge” of coronavirus infections around the holidays that could send people back into their homes and shutter businesses.
“This surge in cases has the potential to significantly slow down overall economic activity and therefore employers’ desire to hire,” said Nick Bunker, director of economic research at Indeed.com. “The pullback from those households could slow consumption and therefore overall economic growth,” he said — a major risk given that consumer spending fuels some two-thirds of economic activity.
The BLS data came two days after a lackluster report on jobs growth by payroll processor ADP in conjunction with Moody’s Analytics, which found that employers added 307,000 private sector jobs last month, in contrast to the 475,000 expected among economists surveyed by Dow Jones.
“ADP’s employment report was somewhat disappointing,” said Julia Pollak, labor economist at ZipRecruiter.com. “Ideally, we’d be adding 2 million a month and really climbing out of this recession.”
Two of the past three weekly jobless claims reports showed increases, reversing a months-long trend of improvements — but seeing how many people are losing jobs is only part of the equation, said Dan North, chief economist, North America at Euler Hermes.
“It does not tell the other half, which is the number of people becoming employed. You would expect with the increase in lockdowns, you would see fewer people becoming employed as well.”
Data bears this out: According to Glassdoor.com, job openings fell by 2.5 percent on a month-to-month basis and are still down by more than 10 percent from pre-pandemic levels.
“It is instructive that this decline has been very broad, which points to a repeat of what we saw in the spring, but on a smaller scale,” said Daniel Zhao, senior economist at Glassdoor. “Basically, every major group except for health care has seen job openings fall,” he said.
Since job openings are a forward-looking metric, economists are looking ahead with some trepidation to the December jobs report, which will be released just after the new year.
“Ultimately, the virus is in the driver’s seat. The virus is what determines the trajectory of the recovery,” Zhao said.
The profound distortion in usual hiring patterns that typically take place around the holidays will make forecasting difficult, North said. “There has been much less holiday hiring than the seasonal adjustments would normally account for, so that would hold the December… jobs numbers down as well,” he said.
Although the promise of a vaccine has raised the hopes of investors, public health officials warn that a large-scale rollout sufficient to protect much of the population could still be months away.
“It’s hard to see exactly when the recovery can really start,” Pollak said. “The start of vaccination is not enough. We need people to feel totally safe gathering in large numbers.”
Canada worried by Biden’s ‘Buy American’ plans, will make issue a priority
OTTAWA (Reuters) – Canada is worried by U.S. President Joe Biden‘s plans for a “Buy American” program to boost domestic industry and it will be a priority for talks with the new administration, Finance Minister Chrystia Freeland said on Monday.
The two neighbors have highly integrated economies as well as one of the world’s largest bilateral trading relationshipsand Canada fears its firms could lose out if U.S. procurement rules are tightened.
Biden is expected to sign an executive order later on Monday to increase domestic manufacturing and close loopholes in existing provisions, which structure the $600 billion in goods and services the federal government buys each year.
“I am concerned. We are always concerned by ‘Buy American’ … for sure that is going to be an issue very very high on our agenda in our work with the Biden administration,” Freeland told reporters.
Canadian governments have had to deal with ‘Buy American’ provisions from previous U.S. governments only to discover “the devil is very often in the details,” she added.
“We find we are very often able to explain to our American partners that trade is in the mutual interests of Canadians and of Americans,” she said.
Biden’s first conversation with a foreign leader last Friday was with Canadian Prime Minister Justin Trudeau, who raised the “Buy American” issue and urged the President to “avoid unintended consequences that can hurt both countries,” a Canadian government source said.
(Reporting by David Ljunggren; Editing by Chris Reese and Paul Simao)
Opinion: Plant protein beckons as a key component of economic diversity – Calgary Herald
Article content continued
Alberta can add value through processing to many of our crops — fractionating the plants into ingredients such as protein, starch and fibre that will then be exported or further developed locally into commercial products for food, beverages, pharmaceuticals, nutraceuticals, cosmetics, pet food or livestock feed.
Take peas alone: if we process 35 per cent of the average pea crop grown in Alberta, it will add an additional $1 billion annually to the provincial economy compared to just exporting the crop as a bulk commodity.
But there is growing competition globally in plant-ingredient processing and there is already disparity within the Prairie provinces.
In Western Canada, $1 billion has been invested into protein processing plants in the past few years. However, Alberta has not yet announced a single commercial facility that extracts pea protein, even though our farmers grow nearly half of the field peas in the West. Every tonne is exported.
Alberta is at risk of letting this moment pass us by while others move ahead decisively.
What needs to happen?
First, and most importantly, the provincial government must make the plant-ingredient processing sector one of its top priorities.
Developing a plan is key. Elected officials and bureaucrats at all levels need to demonstrate a depth of knowledge — publicly and in private negotiations — backed with a clear strategy and a true commitment. Premier Jason Kenney and Agriculture and Forestry Minister Devin Dreeshen have said agriculture will drive economic recovery and have allocated funds for investing in value-added processing. Focusing on a cohesive plant-based strategy and making it a government priority will ensure we seize this realistic chance to diversify.
Japan’s economy to recover to pre-pandemic levels in 2022, Bank of Japan’s Kuroda says – The Globe and Mail
Japan’s economy will likely recover to levels before the coronavirus pandemic as early as March next year, Bank of Japan Governor Haruhiko Kuroda said on Monday, offering an upbeat view on its recovery prospect despite headwinds from COVID-19.
Kuroda also said a combination of expansionary fiscal and monetary policies have successfully stabilized Japan’s economy, signalling that the BOJ has offered sufficient stimulus for now to cushion the economic blow from the health crisis.
“Both fiscal and monetary policies have been successful in preventing corporate failures and unemployment,” Kuroda told a virtual meeting of the World Economic Forum.
“We expect, probably by the end of fiscal 2021 or early fiscal 2022, that Japan’s economy would recover and come back to levels before the pandemic started,” he said.
In its latest quarterly projections released last week, the BOJ expects the world’s third-largest economy to expand 3.9% in the fiscal year beginning in April, followed by a 1.8% increase in fiscal 2022.
The key challenge for policy-makers would be to prevent the pandemic from leaving a lasting scar on the economy, and to provide impetus to growth such as by promoting digitalization and a “green” economy, Kuroda said.
“Greening the economy…was important before the pandemic. But now it’s more important. It would make our economy more sustainable. At the same time, it would provide some growth impetus,” he said.
After suffering its biggest postwar slump in April-June last year, Japan’s economy has been recovering moderately from the pandemic thanks to a rebound in exports and output.
But a resurgence in infections has forced the government to declare a new state of emergency in January, threatening to cool consumption and push the economy back into recession.
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