WASHINGTON (AP) — In a surprising burst of hiring, America’s employers added a robust 467,000 jobs last month, a sign of the economy’s resilience in the face of a wave of omicron infections.
The government’s report Friday also drastically revised up its estimate of job gains for November and December by a combined 709,000. It also said the unemployment rate ticked up from 3.9% to a still-low 4%, mainly because more people began looking for work and not all of them found jobs right away.
The strong hiring growth for January, which defied expectations for only a slight gain, demonstrated the eagerness of many employers to hire even as the pandemic raged. Businesses appear to have regarded the omicron wave as having, at most, a temporary impact on the economy and remain confident about their longer-term prospects.
“Employers have assumed that omicron would be painful but short term, so they haven’t changed their hiring plans,” said Mathieu Stevenson, the CEO of Snagajob, a job listings site focused on hourly workers. “Demand from employers is as strong as ever.”
January’s hiring gain and sharp upward revisions to previous months mean that the United States has 1.1 million more jobs than government data had indicated only a month ago. The solid hiring, along with steady wage gains, are boosting consumer spending, which has collided with snarled supply chains to accelerate inflation to a four-decade high.
Adjusted for price increases, Americans’ paychecks on average don’t go as far as they did a year ago, even though many workers have received raises. Many households, especially lower-income families, are struggling to afford necessities like gas, food, rent and child care.
Those trends will give the Federal Reserve more leeway to raise interest rates, perhaps even faster than it had planned, to cool inflation. The Fed has indicated that it will begin raising rates in March, and it could do so again at its next meeting in May. Faster rate hikes could reduce borrowing and spending and possibly weaken the economy.
Stocks initially fell on the expectation that the Fed will tighten credit more quickly, before share prices recovered in early afternoon. But the yield on the 10-year Treasury jumped nearly one-tenth of a percentage point, to 1.91%, a sign that investors anticipate higher borrowing costs.
Across the economy, most industries hired workers last month, including retailers, which added more than 61,000 jobs, and restaurants and hotels, which gained 131,000. Shipping and warehousing firms added 54,000. Many companies in those industries likely held onto some of the workers they had hired over the winter holidays, economists said, rather than laying them all off.
Omicron did leave some fingerprints on the report: The percentage of Americans who were working from home rose to more than 15%, up from 11% in December. And the number of people out sick last month soared to 3.6 million, up from fewer than 2 million in the previous January and about triple the pre-pandemic level. This forced many companies, from restaurants to retailers to manufacturers, to reduce their hours or even close because of staff shortages.
Among the workers who were out sick was Perla Hernandez, whose entire family of eight contracted COVID last month. Hernandez and her husband and 20-year old daughter all missed work, a major blow to the family’s finances.
Hernandez, 42, who lives in the San Jose, California, area, missed six days from her job as a Burger King cook and janitor. Because she has no paid sick leave, the paycheck she receives every two weeks amounted to just $230.
About one-fifth of U.S. workers receive no sick pay, and the proportion is far higher among lower-paid service workers. Only 33% of workers who are at the bottom 10% of the pay scale receive paid sick leave, compared with 95% of employees in the top 10%.
“Thank God that we already had paid the rent for January,” she said through an interpreter. “We had to go to a food bank.”
Hernandez said she earns $15.45 an hour, after having received a 45-cent raise six months ago. But she and her colleagues, including managers, have been working especially long hours because the restaurant has had difficulty hiring.
Daniel Zhao, senior economist at the employment website Glassdoor, said the healthy hiring — not only for January but also for November and December — is a sign that last month’s gains weren’t merely a blip.
“This is an actual trend, and job growth was faster than we realized,” Zhao said.
A greater proportion of Americans are also now working or looking for work, the report showed, a trend that makes it easier for companies to find workers. It suggests that concerns about long-term labor shortages may have been overblown, at least in some industries.
“There are workers out there — it’s just taking time to integrate them back into the labor force,” Zhao said.
Grady Cope, the CEO of Reata Engineering and Machine Works, said nine of his 43 staffers were out sick last month — the most he can remember in nearly 30 years of running the company.
But Cope’s company, which makes parts for airplane and medical device manufacturers, also has the biggest order backlog it’s ever had. He wants to add at least eight employees, including machinists, assemblers and engineers. Last month, he raised pay 18%, far more than the usual 3%-4% increases. His company is based near Denver, where rents and other costs are rising fast.
“People have to have wages so they can support themselves and raise families,” he said.
Still, Cope has been increasing his own prices to offset his workers’ higher pay. The competition for workers, he said, is the toughest he’s ever seen. In October, four of his workers quit. Only one gave notice.
“That’s never happened in 28 years,” he said.
The overall outlook for the job market remains bright, with openings near a record high, the pace of layoffs down and the unemployment rate having already reached a healthy level. The nation gained more jobs last year, adjusted for the size of the workforce, than in any year since 1978. Much of that improvement represented a rebound from record job losses in 2020 that were driven by the pandemic recession.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
