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Unemployment rate in London area drops as economy recovers from COVID-19 – Global News

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The London-St. Thomas unemployment rate fell to 9.3 per cent in August, according to numbers released Friday morning by Statistics Canada.

It marks the second straight month of declining unemployment in the region after the figure fell to 10.5 per cent in July.

The area added 6,900 jobs in August.

“Prior to COVID, we would be delighted with the kind of job increase we are seeing but let’s remember that’s getting us back partly towards where we were prior to COVID,” said Gerry McCartney, CEO of the London Chamber of Commerce.

London-St.Thomas is still down close to 11,900 jobs since the coronavirus pandemic began.

Nationally, the pace of job gains slowed compared to July, which saw an increase of 419,000 new jobs, as 246,000 jobs were added in August.

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Unemployment rate reaches 7-year high in London, St. Thomas

The increase was mainly concentrated in full-time work, which lagged behind an increase in part-time employment.

The federal unemployment rate fell to 10.2 per cent in August compared with 10.9 per cent in July.

The figure marked the fourth consecutive month of gains after COVID-19-related lockdowns this spring, bringing the number to within 1.1 of million pre-pandemic levels.

Employment also rose faster for women than men for the third straight month as Statistics Canada reported women gained about 150,000 positions in August compared to 96,000 for men.

Read more:
Canada adds 246K new jobs in August, unemployment rate falls amid coronavirus

McCartney attributes the increase in women returning to work to the fact many women were the ones who had to stay home and take care of kids during the shutdown.

He said it will also be interesting to look at what happens at the end of the year when subsides like the Canada Emergency Response Benefit (CERB) no longer exist.

Once pandemic subsides do end, McCartney said it will likely hurt the economy because people will not have the money to contribute to the consumer market anymore.

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“I am still concerned we are hearing forecast numbers of 30 per cent of all small businesses not surviving past December 2020,” McCartney said. “Those will put a whole new line of people on the unemployment line without any of these subsidies.”

“Even if they are half right or half wrong, it still concerning number.”

© 2020 Global News, a division of Corus Entertainment Inc.

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Pandemic's impact to influence economy, social order for long time, forum told – Assiniboia Times

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BANFF, Alta. — The COVID-19 pandemic is fundamentally changing the way the world’s economic and social orders function and some of those effects will be permanent, speakers at the Global Business Forum in Banff said on Thursday.

In a series of online sessions broadcast to a ballroom at the Banff Springs Hotel with just three people per table to prevent spread of the disease, subject experts from around the world said the virus has accelerated and amplified trends they were already seeing, as well as taking a few surprising turns.

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The pandemic has drawn attention to food security and that stands to boost a technological revolution in agriculture in Canada, said Murad Al-Katib, CEO of Saskatchewan food processing giant AGT Food and Ingredients Inc.

The expansion of plant protein crops such as peas, lentils, and other legumes in Prairie fields has boosted productivity of the industry, and processing those crops into value-added products will continue to grow, he said, while calling on government to help that process.

“Governments are paying attention now. COVID has everyone spooked,” he said.

“COVID wasn’t a slap in the face, it was a punch in the nose for governments to recognize that they can’t just leave food and food systems entirely to fragmented private sector imports and distribution.”

South of the border, meanwhile, recent civil unrest and violence has been escalated by a pandemic that has disproportionately hurt poorer families and Black people, while adding greatly to the fortunes of the richest Americans, said Trevor Noren, executive director of New York analytics firm 13D.

He said COVID-19 is “gasoline for a fire that had already been lit” that could accelerate generational change in ways that historically have been caused by wars.

“We believe COVID could prove to be that catalyst today, the event that forces a reckoning with the inefficiencies and vulnerabilities of excessively concentrated wealth and power,” he said.

“It will mean a backlash against the three primary forces that have driven consolidation: globalization, digitization and financialization.”

World oil demand has recovered to about 90 million barrels per day and that’s less than the 100 million bpd that existed before the COVID-19 slump, but it doesn’t mean the world has reached “peak oil,” said Michael Tran, managing director and energy strategist for RBC in New York.

“With COVID comes the idea of slower mobility, the demise of travel, we’re all working from home, this has really altered how we think about oil demand, but in my experience, acute events that impact oil demand have a shorter term impact than (government) policy shifts do,” he said.

He said events like the 9-11 attacks sharply affected oil demand, but it was short-term, while former president Barack Obama’s fuel efficiency standards had a more lasting affect.

Demand in the developed world peaked long ago, he added, but oil demand in the developing world is expected to continue to grow.

Cross-border trade between Canada and the United States has remained strong despite restrictions on in-person travel, said Kirsten Hillman, Canada’s ambassador to the U.S., adding she expects the partners’ traditional ties to recover fully when those restrictions are lifted.

She said the recent decision by the U.S. to withdraw threatened tariffs on aluminum shows that the new U.S.-Canada-Mexico trade agreement is working as a defence against protectionism.

The pandemic first erupted in China and that’s where it is expected to begin to meet its end, said Jeongmin Seong, a partner with McKinsey Global Institute in Shanghai, in a presentation.

Dealing with the pandemic forced the country, already an earlier adopter of digitization, to take it in new directions such as using remote communication in health care, real estate and education, and many of those applications will continue, he said.

He added Chinese business leaders have become more focused on its domestic customers and less interested in developing markets with the rest of the world, while Chinese consumers have become more financially prudent and more debt averse.

This report by The Canadian Press was first published Sept. 24, 2020.

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If Donald Trump drags the U.S. economy down, Canada's economy is going along for the ride – Toronto Star

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From economy to psychology, from environment to diplomacy, what happens in the U.S. election will have a profound impact on Canada. Northern Exposure is a series of stories looking at what’s at stake for us as America decides its future.

WASHINGTON—“Over the years I have learned,” a reader in British Columbia wrote to me this week, “that when the U.S. coughs, Canada gets a very bad cold, perhaps the flu,” The saying has a particular resonance during a pandemic, but in few areas is the analogy more apt than when it comes to the economy.

Roughly a fifth of Canada’s gross national product comes from exports to the U.S., which accounts for roughly 75 per cent of Canada’ foreign trade. The U.S. is also Canada’s largest source of foreign investment. As of 2011, U.S. subsidiaries in Canada employed more than 546,000 people.

“Our proximity to the U.S. is a huge source of our prosperity. We live next to such a massive market that is that is willing to do business with us, right?” said Peter Loewen from the University of Toronto’s Munk School of Global Affairs and Public Policy. “People shouldn’t underestimate that. These levels of wealth are all recent, and they come from our capacity to trade.”

And when it comes to trade, the presidency of Donald Trump induced some coughing fits among Canadians — or at least some gagging sounds — when he imposed import tariffs and forced the renegotiation of the North American Free Trade Agreement by threatening to tear it up. It’s been a turbulent time.

Considering the upcoming election, veteran trade lawyer Daniel Ucjzo of Dickinson Wright in Ohio would expect that volatility to change if the administration did. “I mean, it wouldn’t be trade policy by tweet,” he said in a recent phone interview.

“This relationship revolves around the relationship between the leaders, whether we like it or not,” Ujczo said. If Trump is reelected and Trudeau remains prime minister, “I think we’ll see pretty much more of the same — and there will need to be a focus on a more constructive relationship between those two.”

If Trump’s Democratic opponent, Joe Biden, were to be elected, however, Ujczo foresees a stronger relationship, between both the leaders and their cabinet-level officials.

He’s not the only one who thinks so. Kathryn Friedman, an expert on North American relations at the University at Buffalo, points out that when Biden was the U.S. vice-president, his last official visit was to Ottawa, where he praised Canada as an ally and a friend; by contrast, Trump and his administration often portray Canada as a national security threat and a predatory trader. Under a Biden administration, Friedman said, “I do think that Canada would be elevated back to its rightful place as one of our closest allies.”

But that relationship, paradoxically, might not make much difference to actual trade policy. The experts I’ve spoken with more or less agree that despite its adversarial and sometimes tortured negotiation, the new USMCA trade deal is a good update on the old NAFTA. No prominent American politicians — and few Canadians — are itching to change it.

Ujczo says he’d expect a less “disruptive” second term from Trump on continental trade, since he’s already laid the groundwork for a new playing field in his first term. But more than that, the Democrats’ trade policy ideas, especially among the congressional delegation, aren’t substantially different from Trump’s protectionist impulses.

“Canadians always think that Democrats are more favourable because they’re aligned on socio-cultural ideology, but Democrats have really not been great for Canada on trade issues,” he said. “I do think we would see more predictability from the White House, but I anticipate less predictability from Congress.”

A Biden administration, meanwhile, would likely cancel the Keystone XL pipeline, a project to which Canada’s oil industry and governments are deeply committed.

Biden would also bring the United States back into the Trans Pacific Trade Partnership “within the first week or so” of his administration, according to Chris Sands, who leads the Canada Institute at the Wilson Center in Washington. “What does that mean for Canada, which is already a member? Well, good news, bad news,” said Sands. “Suddenly you’ve got another competitor in that family and you lose one of the little advantages you had over the U.S.”

Aside from direct trade issues, the Canadian economy generally feels the strength or weakness of the American economy through investment, jobs at American corporations and tourism, among other things. That means Canada will be watching its neighbour’s recovery from the COVID-19-induced recession very closely.

In managing the virus itself, probably a precondition of a full recovery, Trump has graded his response this year an “A+” while pinning virtually all hope for a quick economic recovery on the quick development of a vaccine.

Biden has announced a more aggressive response to the spread of the virus, in line with what many epidemiologists have recommended, which may include locking down some areas of the country again or implementing national rules on masks. Biden has also staked part of his economic platform on stimulus, sometimes invoking Franklin Roosevelt’s Great Depression-era New Deal as a parallel.

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Polls show many American voters see the economy, and the prospects for dealing with it, as an area of strength for Trump. By contrast, 13 Nobel Prize-winning economists issued a statement this week supporting Biden, saying his economic policies “will result in economic growth that is faster, more robust, and more equitable.”

That said, predicting the trajectory of the American economy under any president is a very difficult job.

What isn’t difficult to see is that whatever direction it goes, it is likely to take Canada’s economy at least some of the way with it.

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Conversations are opinions of our readers and are subject to the Code of Conduct. The Star does not endorse these opinions.

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Why the U.S. Risks Repeating 2009’s Mistakes as the Economic Rebound Slows – The New York Times

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Trillions of dollars in federal aid to households and businesses has allowed the U.S. economy to emerge from the first six months of the coronavirus pandemic in far better shape than many observers had feared last spring.

But that spending has now largely dried up and hopes for a major new aid package ahead of the Nov. 3 election are all but dead, even as the virus persists and millions of Americans remain unemployed. Already, there are signs that the economic rebound is losing steam, as some measures of consumer spending growth decelerate and job gains slow. Applications for jobless benefits rose last week, with about 825,000 Americans filing for state unemployment benefits.

The combination of a moderating economic rebound and fading government support are an eerie echo of the weak period that followed the 2007 to 2009 recession. In the view of many analysts, a premature pullback in government support back then led to a grinding recovery that left legions of would-be employees out of work for years. In recent weeks, prominent economists have warned that both the United States and Europe, where many early responses are drawing to a close, were at risk of repeating that mistake by cutting off government aid too soon.

“The initial response was good, but we need more,” said Karen Dynan, who was chief economist at the Treasury Department in the Obama administration and now teaches at Harvard. The decision to pull back on spending a decade ago, she said, “really prolonged the period of weakness after the great recession.”

In Europe, some national governments that have spent aggressively to subsidize wages and curb layoffs are wrapping up those efforts. While large countries including Germany have indicated that they remain willing to provide more support, some economists warn that continued aid announced in France and elsewhere might fall short of what is needed in the near term.

In the United States, the situation is more immediately worrying. Leaders of both major political parties have expressed support, at least in theory, for additional aid. But the parties remain far apart, with Democrats pushing for a large package and Republicans arguing that a smaller plan will suffice.

The ability to reach a compromise in the coming weeks has been further complicated by a looming confirmation battle to replace Ruth Bader Ginsburg on the Supreme Court.

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“That’s my great concern, that we’re going leave and not have a stimulus Covid package put together,” Senator Roy Blunt, Republican of Missouri, said Thursday.

Top Democrats, responding in part to growing concern among moderate lawmakers about the stalemate over providing aid, were working on a scaled-back package, according to a person familiar with the plans. It remains unclear whether the House will vote on such a measure, which would provide roughly $2.4 trillion in aid, or whether negotiations will resume in earnest.

One factor making a quick agreement even less likely: The economic revival is slowing, but not as sharply as some economists predicted would happen once expanded unemployment insurance and other programs began to ebb.

Credit…Amr Alfiky/The New York Times

Job growth slowed in July and August but remained positive. Consumer spending, which rebounded sharply once federal money started flowing in April, has likewise seen a more gradual rebound but has not fallen. Layoffs, as measured by claims for unemployment insurance, have continued to trend down, although they remain high by historical standards.

But many economists said that allowing the economy to slow at the current moment — with millions out of work or underemployed — could lead to long-term economic scarring. Employers have still hired back less than half of the 22 million workers they laid off in March and April, and the unemployment rate is higher than the peak of many past recessions. Even optimistic forecasts imply that gross domestic product will shrink more this year than in the worst year of the last recession.

“A stalling recovery when we’re stalling at near the worst point of the great recession is a terrible outcome,” said Tara Sinclair, an economist at George Washington University.

Jerome H. Powell, the Fed chair, made clear during congressional hearings this week that the economy, while recovering, would likely need more support.

“The power of fiscal policy is unequaled, by really anything else,” Mr. Powell said during testimony before a House subcommittee on Wednesday. “We need to stay with it, all of us,” adding, “the recovery will go faster if there’s support coming both from Congress and from the Fed.”

Credit…Pool photo by Kevin Dietsch

His colleague Eric Rosengren, president of the Federal Reserve Bank of Boston, said Wednesday that additional fiscal policy “is very much needed” but noted it “seems increasingly unlikely to materialize anytime soon.”

Some economists warn that the economy could begin to shrink again if Congress doesn’t act. Many households were able to save in the spring, thanks to federal aid and shutdown orders that kept them from spending money on restaurant meals and hotel stays. Households socked away about one-third of their disposable incomes in April, and while the savings rate has come down since, it remained sharply elevated from pre-crisis levels through July. That should create some buffer.

But those funds won’t sustain jobless families indefinitely now that extra unemployment benefits have expired and a partial supplement supported by repurposed federal funds is on the brink of running out. And businesses that were kept afloat during the summer may struggle when colder weather puts an end to outdoor dining and other activities.

There is an alarming precedent for what happens when support fades in the midst of an uncertain economic moment.

In the early stages of the 2008 financial crisis, Congress and the White House — first under President George W. Bush, then under President Barack Obama — pumped billions of dollars into the economy in the form of tax cuts for individuals and companies, infrastructure spending, extended unemployment benefits and other measures.

But Mr. Obama was unable to win approval for further large-scale stimulus efforts, and by 2010 Congress had effectively ceded to the Federal Reserve the job of managing the still-tenuous economic recovery.

“The lesson from the last crisis is that we had elevated unemployment for years, and it was a slow grind to work that down,” Robert S. Kaplan, president of the Federal Reserve Bank of Dallas, said in an interview Monday, explaining that he supports extending fiscal aid. “We have a chance here, if we act quickly, to mitigate the lasting damage that we saw.”

The post-financial crisis pullback in government spending was even more dramatic in Europe, where austerity was enforced across countries with weaker economies and higher debt levels, and where the European Central Bank raised interest rates in 2011, removing monetary support years before the Fed first lifted rates in late 2015. Another slump ensued across European economies, bringing with it years of high unemployment, low inflation and weak growth.

There are important differences between the two crisis eras, especially in the United States. The economy was far stronger before the pandemic hit than in 2007, when inflated home prices, risky lending and financial engineering left the banking system vulnerable. And policymakers responded far more quickly and aggressively this time around.

The Fed cut interest rates close to zero in March, before data showing widespread economic damage had even begun to emerge. In the last crisis, the Fed didn’t take that step until the end of 2008, a year after the recession had begun. The European Central Bank rolled out massive bond-buying programs, something monetary policymakers in the currency block resisted in the immediate aftermath of the 2009 crisis.

But central banks have less room to adjust their policies to bolster growth now than they did a decade ago. Interest rates and inflation have fallen to low levels across advanced economies, stealing potency from monetary policy tools that work by making credit cheap.

That’s where fiscal policy — elected officials’ ability to tax and spend — comes in. Economic theory suggests that fiscal policy can be effective at times when monetary policy is not.

Initially, policymakers across advanced economies seemed far more willing to spend heavily and amass huge deficits than they were during the last crisis, at least in part because the same low interest rates robbing central banks of their power have made payments on government debt cheaper.

In the early days of this crisis, Congress approved legislation that sent direct payments to most American households, established a small-business assistance program and added $600 a week to unemployment checks, while expanding the system to cover millions more jobless workers. Together, the programs dwarfed the response to the last recession.

Credit…Joseph Rushmore for The New York Times

The aggressive response was successful. After shedding millions of workers in March and April, companies began bringing them back in May and June. Stimulus checks and that extra $600 per week lifted personal incomes in April and May, buoying spending. A predicted wave of foreclosures and evictions largely failed to materialize. By August, the unemployment rate had fallen to 8.4 percent, defying expectations that it would remain in double digits into next year.

Mr. Powell said government spending should get “credit” for the pace of the rebound but warned that risks remain if key programs are allowed to permanently lapse. As unemployed workers run through their savings, they might pull back on spending and lose their homes, he said during Senate testimony on Thursday.

Without more help “we’ll see sooner or later, probably sooner, that the economy has a hard time sustaining the growth that we’ve seen — that’s the risk,” he said.

Economists said Mr. Powell appears to have learned a lesson from the aftermath of the last recession: When the Fed is forced to try to rescue the economy on its own, the result is a painfully slow recovery that takes years to reach many of the most vulnerable households.

The consequences of another slow recovery would almost certainly fall disproportionately on low-income families, many of them Black and Hispanic. Those workers were among the last to benefit from the plodding recovery after the last recession, and have been among the hardest hit by the current crisis.

“This pandemic, and our efforts here, could very well create even greater inequality in our nation than there was even before the pandemic,” said Representative Andy Kim, Democrat of New Jersey and a former Obama administration official. “Some are going to be able to get through this much, much better than others, and those that are not? This is one of those once in a lifetime situations that could very well cripple them for a generation if we don’t take some of the necessary steps in the next few weeks and months.”

Peter S. Goodman and Emily Cochrane contributed reporting.

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