Economy

US Fed says economy strengthening amid disruptions, labor shortages – BNN

Published

3 years ago

July 14, 2021

The pace of the U.S. recovery picked up in the past two months, though reopening the economy from the COVID-19 pandemic created increasing strains in attracting workers and filling orders, the Federal Reserve said.

“The U.S. economy strengthened further from late May to early July, displaying moderate to robust growth,” the U.S. central bank said in its Beige Book survey released Wednesday. “Supply-side disruptions became more widespread, including shortages of materials and labor, delivery delays, and low inventories of many consumer goods.”

The report was based on information collected by the Fed’s 12 regional banks through July 2 and compiled by the Federal Reserve Bank of Boston.

Fed officials are considering how quickly to trim monetary policy support with the expansion of COVID-19 vaccinations brightening the outlook. The Beige Book comes ahead of the Federal Open Market Committee’s next policy meeting, on July 27-28, when it’s set for further talks on the appropriate timing of scaling back asset purchases.

The FOMC has committed to reducing the US$120 billion monthly pace of bond buying after there’s “substantial further progress” on inflation and employment. Several Fed officials, including St. Louis Fed President James Bullard and Dallas Fed President Robert Kaplan, have urged the committee to move ahead with planning to withdraw stimulus.

Prolonged Difficulty

“Healthy labor demand was broad-based but was seen as strongest for low-skilled positions,” the report said. “Firms in several districts expected the difficulty finding workers to extend into the early fall.”

Fed Chair Jerome Powell earlier Wednesday said the U.S. economic recovery still hasn’t progressed enough to begin scaling back asset purchases.

While the U.S. added 850,000 jobs last month — the most in 10 months — payrolls are still nearly 7 million below their pre-pandemic level.

“All districts noted an increased use of non-wage cash incentives to attract and retain workers,” the Fed said in the Beige Book. “Firms in several districts expected the difficulty finding workers to extend into the early fall.”

In the San Francisco district, for example, employers noted a widespread shortage of truck drivers and other workers in the transportation and logistics sector, which exacerbated supply-chain disruptions and delays. Moreover, employers cited a lack of immigrant labor and difficulties in obtaining worker visas.

In Chicago, while job openings were elevated, “workers were being more selective about workplace environment, scheduling flexibility, and pay,” the report found.

Price Pressures

On the inflation front, data Tuesday showed the consumer price index surged the most since 2008 in June. Fed officials have largely written off the recent price pressures as owing to transitory factors associated with supply-chain bottlenecks and the reopening of service industries as the pandemic recedes.

“While some contacts felt that pricing pressures were transitory, the majority expected further increases in input costs and selling prices in the coming months,” the Fed said in the Beige Book report.

The Beige Book includes detailed anecdotes intended to give more color to complement formal reports for understanding of the economy.

A number of tourist-dependent locations reported strong recovery from COVID-19 in leisure spending, including New York City; Washington D.C.; Cape Cod, Massachusetts; and beaches that are part of the Richmond Fed district. In New York City, hotel occupancy rates climbed above 60 per cent in June, a post-pandemic high, the report found.

“Some beach communities reported record visitation, as hotels saw record-breaking occupancy and beach short-term rentals were booked solid through the summer and into the fall” in the Richmond district, which includes North and South Carolina coasts.

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Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

21 hours ago

October 21, 2024

Anne Joseph

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

5 days ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

6 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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