Connect with us

Economy

US hiring slows for 3rd month in sign of struggling economy – TimminsToday

Published

 on


WASHINGTON — America’s employers added 661,000 jobs in September, the third straight month of slower hiring and evidence from the final jobs report before the presidential election that the economic recovery has weakened.

With September’s hiring gain, the economy has recovered only slightly more than half the 22 million jobs that were wiped out by the viral pandemic. Nearly 10 million jobs remain lost — more than were shed during the entire 2008-2009 Great Recession. And the pattern of slower hiring will delay a full recovery of jobs: Compared with September’s more modest gain, employers added nearly 1.5 million jobs in August, 1.8 million in July and 4.8 million in June.

The unemployment rate fell last month to 7.9% from 8.4% in August, the Labor Department said Friday. Since April, the rate has tumbled from 14.7%. But last month’s drop in joblessness reflected mainly a drop in the number of people seeking work, rather than a surge in hiring. The government doesn’t count people as unemployed if they aren’t actively looking for a job.

“There seems to be a worrisome loss of momentum,” said Drew Matus, an economist at MetLife Investment Management. “There’s a lot of caution on the part of employers.”

The September figures, Matus said, show that employers are working their existing employees for longer hours, particularly in services such as retail, warehousing, and restaurants and hotels, and may be reluctant to hire new people. Indeed, last month’s gains appeared to reflect mainly temporarily laid-off workers being recalled to their old jobs, continuing a trend in place since April, rather than people joining new employers. In a worrisome sign, the number of laid-off workers who say their jobs are gone for good rose from 3.4 million to 3.8 million.

The jobs report coincided with other data that suggests that while the economic picture may be improving, the gains have slowed since summer. The economy is under pressure from a range of threats. They include the expiration of federal aid programs that had fueled rehiring and sustained the economy — from a $600-a-week benefit for the unemployed to $500 billion in forgivable short-term loans to small businesses.

Friday’s numbers offered voters a final look at the most important barometer of the U.S. economy before the Nov. 3 presidential election — an election whose outcome was thrown into deeper uncertainty by the announcement early Friday that President Donald Trump has tested positive for the coronavirus.

Still-high unemployment is a potential political liability for Trump. Yet President Barack Obama was re-elected in 2012 even with unemployment at 7.8% on the eve of the election. And even as the economy has struggled to sustain a recovery, it has remained one of the few bright spots in Trump’s otherwise weak political standing. Roughly half of voters approve of his performance on the economy even though only about three in 10 voters believe the country is moving in the right direction.

But the president’s coronavirus diagnosis threatens to upend any political benefit he might derive from public views of the economy. With just a month to go before Election Day, Trump’s health status and his downplaying of a pandemic he has been accused of mishandling could overshadow almost everything else.

The September jobs report showed that women in their prime working years are quitting their jobs and leaving the workforce at much higher rates than men, a sign that remote schooling may be pushing many women to stay home.

“Women continue to bear the brunt of this recession,” said Julia Pollak, a labour economist at ZipRecruiter. “They are supervising at-home schooling.”

This is the first U.S. recession in which services jobs have been hardest hit, instead of goods-producing industries like manufacturing, and women make up a greater share of the workforce in service industries like retail and health.

And while the unemployment rate for Black workers fell sharply last month, it remained much higher than for whites. The African-American rate fell to 12.1% in September from 13% the previous month. For whites, unemployment dropped rom 7.3% to 7%. For Hispanics, the jobless rate fell from 10.5% to 10.3%.

A recent wave of layoffs by large companies has heightened fears that the viral outbreak still poses a serious threat to the economy.

Disney said this week that it’s cutting 28,000 jobs, a consequence of reduced customer traffic and capacity limits at Disney World in Florida and the ongoing closure of Disneyland in California.

Allstate said it will shed 3,800 jobs, or 7.5% of its workforce. Marathon Petroleum, the Ohio refiner, is slashing 2,000 jobs. And tens of thousands of airline workers are losing their jobs this month as federal aid to the airlines expires. The airlines had been barred from cutting jobs as long as they were receiving the government assistance.

While congressional negotiations, led by House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin, continue, the prospect of a major new economic aid package before the November elections is highly uncertain.

The United States is hardly alone in struggling with a weakened job market. Unemployment has risen for a fifth straight month in Europe in August and is expected to grow further amid concern that government support programs won’t be able keep many businesses hit by coronavirus restrictions afloat indefinitely.

Until a vaccine is developed, many economists say hiring and economic growth won’t fully recover. Restaurants, for example, rehired many employees over the summer as outdoor dining picked up. But as temperatures cool, business may fall off again, which could force many restaurants to lay off workers again. One in six restaurants have shut down because of the viral pandemic, the National Restaurant Association says.

Slowing job growth has raised the spectre of a prolonged downturn that feeds on itself and becomes harder to fully reverse. Many temporary layoffs are becoming permanent as hotels, restaurants, airlines, retailers, entertainment venues and other employers anticipate a longer slump than they initially expected. There is also growing fear of a resurgence of the virus, which would compound the threat.

The longer that laid-off workers fail to find jobs, the more likely it is that they will have to look for new work with new employers or in different occupations.

___

AP National Political Writer Steve Peoples contributed to this report from New York.

Christopher Rugaber, The Associated Press



Let’s block ads! (Why?)



Source link

Continue Reading

Economy

ADRIAN WHITE: Underground economy is thriving – The Journal Pioneer

Published

 on


There is no doubt that COVID-19 has changed the way businesses function in Cape Breton. The pandemic has forced many entrepreneurs to reshape operating strategies for financial survival.  

Think of the new safety protocols for restaurants to protect staff and customers from virus transmission. Think sporting events playing out before near-empty stadiums and instead focused heavily on revenues generated from media broadcast of the event.  

There are just too many changes to business practices to list here in this column including the growth of digitization in our economy but I wanted to single out a few examples to illustrate some telling impacts. 

One major impact comes from folks not feeling safe to travel outside the province or eat out in restaurants due to the pandemic. Instead, they are using some of those cash savings to fund home improvement projects right here in the Cape Breton economy. That is a good thing for our community and our workers and it supports the “Shop Local-Buy Local” mantra being promoted by the local business community. 

Demand in the home improvement sector has soared and is so strong that it has led to a shortage of building materials, a rapid rise in material costs and a shortage of skilled labour to take on those home improvement projects.  

Many new contractors have entered the home improvement business in 2020 and many anxious homeowners are in hot pursuit of their services. Sometimes these contractors show up when expected to do a job and sometimes not. This has been a long-standing problem with small contractors in Cape Breton.  

Some contractors present an official written quote including HST for the project leaving a paper trail to follow while other contractors are quite prepared to take cash from the customer thereby avoiding HST. Cash leaves little trail for CRA to follow when it comes to reporting taxable income. 

This practice leads me to shed some light on the underground economy and its impact on our well-being as a province. Statistics Canada defines the underground economy as “consisting of market-based activities, whether legal or illegal, that escape measurement because of their hidden, illegal or informal nature.”  

I use the construction industry as an easy-to-understand example but you can imagine other opportunities for tax avoidance including buying illegal cigarettes, street sold cannabis, cash tips, paying cash for services, Airbnb cash rentals, or offshore bank accounts not being reported to CRA. 

In Nova Scotia, according to Statistics Canada, the underground economy was estimated to be $1.28 billion in 2018. That is near 3 per cent of provincial GDP. This is revenue that escapes government taxation. Nova Scotia’s underground economy as a share of GDP is higher than the national average which is troubling. Taxes on $1.28 billion would go a long way to offset the forecasted 2020 Nova Scotia budget deficit of $853 million due to the pandemic. 

Some of the underground economy is driven by the fact Nova Scotia has the second-highest personal income tax rates in the country. It remains one of three remaining provinces in the country that still practices “bracket creep” on your personal income tax deduction by not adjusting it to CPI on your annual income tax return.  

The higher the taxes the more incentive it provides for individuals and companies to embrace tax avoidance. Alberta has one of the lowest personal income tax rates in Canada and no provincial sales tax. It abandoned “bracket creep” on its residents decades ago. It also has one of the lowest underground economy as a share of GDP rates in the country running at 1.8 percent of provincial GDP.  

British Columbia has the highest ratio at 3.7 percent of GDP. In Canada, the underground economy was valued at a whopping $61 billion in 2018 amounting to 2.7 per cent of national GDP.  

I can only imagine with the increased demand for home improvement projects in Canada due to the pandemic that underground economic activity will likely increase 50 per cent rising close to $90 billion for 2020. 

In Nova Scotia, residential construction accounts for over 25 percent of the estimated underground economy GDP.  The next six largest contributors to the underground economy amount to about 50 per cent of Nova Scotia’s underground economy. They are retail trade, accommodation/food services, finance/insurance/real estate, manufacturing, professional/technical services and health care/social assistance.   

If we want to grow the Nova Scotia economy and thereby increase tax revenues to pay for the services we all expect, we are going to have to rethink the tax burden on individuals and businesses to bring balance and fairness to the tax environment. It is one of the reasons we struggle to recruit doctors to Cape Breton. Above-average taxes in Nova Scotia hinder economic expansion. High taxes will continue to drive the underground economy and tax avoidance until we address them. 

Adrian White is CEO of NNF Inc, Business Consultants. He resides Sydney & Baddeck and can be contacted at awhite889@gmail.com.

RELATED:

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

You're Not Welcome Here: How Social Distancing Can Destroy The Global Economy – NPR

Published

 on


Paris is under nightly curfew, starting at 9, to curb the spread of rising coronavirus cases.

Kiran Ridley/Getty Images

Kiran Ridley/Getty Images

Stay out.

It’s what people are being asked to tell each other. Less than 10 days ago, London banned people who live in different households from meeting each other indoors, to stop the spread of the coronavirus.

“Nobody wants to see more restrictions, but this is deemed to be necessary in order to protect Londoners’ lives,” London Mayor Sadiq Khan told the London Assembly.

Taking away the welcome mat is key to cutting off the path of the coronavirus. From the beginning of the pandemic, cities, states and countries have banned each other. And now, eight months into lockdowns that have led to immense stress and fatigue among people, some places around the world are introducing even more draconian measures.

The path toward recovery continues to be inherently antisocial and runs counter to how humans interact, live lives and conduct their business. This unwelcome policy — which has already harmed families, societies and economies — has the potential to lead to a tectonic shift in how the world functions in the foreseeable future.

End of globalization?

Some people worry that this moment is strengthening the hand of nationalism that was rising before the pandemic and that it is accelerating the changing relationships between countries.

President Trump’s “America First” strategy of the last four years had increased tensions between the United States and the rest of the world, specifically China. It was already leading to friction in the smooth supply-and-demand economic chain that has been the hallmark of an interdependent global world. But the self-isolation during the pandemic could mean the end of globalization as we know it.

“The coronavirus pandemic could be the straw that breaks the camel’s back of economic globalization,” according to Robin Niblett, director of the think tank Chatham House, in a Foreign Policy article.

Specifically, the global supply chain is very much at risk. Tax deductions in the U.S. designed to bring back jobs in pharmaceuticals, medical supplies, electronics and auto manufacturing have led companies to invest heavily in production in this country in the last few years.

“The needs that surfaced during the pandemic to bolster supply chain resilience may further accelerate such moves,” according to Moody’s Investors Service Senior Vice President Robard Williams.

Social distancing brought mighty economies to their knees

The entire world’s economy has shrunk dramatically. The pandemic delivered the most severe blow to the U.S. economy since the Great Depression as gross domestic product collapsed and millions of jobs were lost.

“This recession was by far the deepest one in postwar history,” Richard Clarida, vice chair of the Federal Reserve, noted in a speech.

A robust economy is dependent upon the movement of goods and people. For instance, restaurants need people to meet, socialize and break bread together. Airlines and hotels need people to travel to conduct business or to see family and friends or new places.

But all that has been vastly reduced. And the effect of that social distancing has been deadly on many businesses. Restaurants have been among the hardest hit. According to Yelp data, more than 60% of restaurants in the U.S. have permanently closed, closely followed by retail stores that sell clothing and home decor (58%) and beauty stores and spas (42%). Airline travel is down around 70%, and hotel occupancy is at record lows.

“Social distancing has stilled our strong economy,” said Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston.

Social distancing is exhausting but works in some places

What’s worse is that despite long and extensive social distancing, there are signs that it has not worked everywhere — especially in freer societies. In fact, more than lockdown orders, it is people’s fears that have a larger impact on their economic behavior, some researchers have found.

The latest signs of increased cases in the U.S. and Europe are even more disheartening for people who feel they have endured a lot.

So, why are governments continuing to rely on lockdowns? That’s because it’s proven that aggressive social distancing does work in countries where the state can enforce strict shutdowns.

In China, where severe lockdowns were enforced in many parts of the country, the coronavirus has been wrestled to the ground. In Wuhan, ground zero of the virus, recent reports cite crowded water parks and night markets. Domino’s Pizza recorded such a huge improvement in sales in the country in recent months that it prompted CEO Richard Allison to call China “a terrific success story in 2020.”

But the Chinese form of enforcement is hard to achieve in democratic societies, most of which are pinning their hopes on a vaccine.

Some of the largest cities in the West are putting in place even more draconian social distancing measures to combat the virus. Paris is under curfew starting at 9 each night. And in London, you can’t even visit or invite a neighbor over for dinner.

But it’s unclear if people in these societies will strictly follow these guidelines or how enforcement will work. It’s already taken a huge toll on the psyche of the populace of many countries. No wonder most people worry that the longer social distancing goes on, a higher price will be paid by households, society and the economy.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

ADRIAN WHITE: Underground economy is thriving – TheChronicleHerald.ca

Published

 on


There is no doubt that COVID-19 has changed the way businesses function in Cape Breton. The pandemic has forced many entrepreneurs to reshape operating strategies for financial survival.  

Think of the new safety protocols for restaurants to protect staff and customers from virus transmission. Think sporting events playing out before near-empty stadiums and instead focused heavily on revenues generated from media broadcast of the event.  

There are just too many changes to business practices to list here in this column including the growth of digitization in our economy but I wanted to single out a few examples to illustrate some telling impacts. 

One major impact comes from folks not feeling safe to travel outside the province or eat out in restaurants due to the pandemic. Instead, they are using some of those cash savings to fund home improvement projects right here in the Cape Breton economy. That is a good thing for our community and our workers and it supports the “Shop Local-Buy Local” mantra being promoted by the local business community. 

Demand in the home improvement sector has soared and is so strong that it has led to a shortage of building materials, a rapid rise in material costs and a shortage of skilled labour to take on those home improvement projects.  

Many new contractors have entered the home improvement business in 2020 and many anxious homeowners are in hot pursuit of their services. Sometimes these contractors show up when expected to do a job and sometimes not. This has been a long-standing problem with small contractors in Cape Breton.  

Some contractors present an official written quote including HST for the project leaving a paper trail to follow while other contractors are quite prepared to take cash from the customer thereby avoiding HST. Cash leaves little trail for CRA to follow when it comes to reporting taxable income. 

This practice leads me to shed some light on the underground economy and its impact on our well-being as a province. Statistics Canada defines the underground economy as “consisting of market-based activities, whether legal or illegal, that escape measurement because of their hidden, illegal or informal nature.”  

I use the construction industry as an easy-to-understand example but you can imagine other opportunities for tax avoidance including buying illegal cigarettes, street sold cannabis, cash tips, paying cash for services, Airbnb cash rentals, or offshore bank accounts not being reported to CRA. 

In Nova Scotia, according to Statistics Canada, the underground economy was estimated to be $1.28 billion in 2018. That is near 3 per cent of provincial GDP. This is revenue that escapes government taxation. Nova Scotia’s underground economy as a share of GDP is higher than the national average which is troubling. Taxes on $1.28 billion would go a long way to offset the forecasted 2020 Nova Scotia budget deficit of $853 million due to the pandemic. 

Some of the underground economy is driven by the fact Nova Scotia has the second-highest personal income tax rates in the country. It remains one of three remaining provinces in the country that still practices “bracket creep” on your personal income tax deduction by not adjusting it to CPI on your annual income tax return.  

The higher the taxes the more incentive it provides for individuals and companies to embrace tax avoidance. Alberta has one of the lowest personal income tax rates in Canada and no provincial sales tax. It abandoned “bracket creep” on its residents decades ago. It also has one of the lowest underground economy as a share of GDP rates in the country running at 1.8 percent of provincial GDP.  

British Columbia has the highest ratio at 3.7 percent of GDP. In Canada, the underground economy was valued at a whopping $61 billion in 2018 amounting to 2.7 per cent of national GDP.  

I can only imagine with the increased demand for home improvement projects in Canada due to the pandemic that underground economic activity will likely increase 50 per cent rising close to $90 billion for 2020. 

In Nova Scotia, residential construction accounts for over 25 percent of the estimated underground economy GDP.  The next six largest contributors to the underground economy amount to about 50 per cent of Nova Scotia’s underground economy. They are retail trade, accommodation/food services, finance/insurance/real estate, manufacturing, professional/technical services and health care/social assistance.   

If we want to grow the Nova Scotia economy and thereby increase tax revenues to pay for the services we all expect, we are going to have to rethink the tax burden on individuals and businesses to bring balance and fairness to the tax environment. It is one of the reasons we struggle to recruit doctors to Cape Breton. Above-average taxes in Nova Scotia hinder economic expansion. High taxes will continue to drive the underground economy and tax avoidance until we address them. 

Adrian White is CEO of NNF Inc, Business Consultants. He resides Sydney & Baddeck and can be contacted at awhite889@gmail.com.

RELATED:

Let’s block ads! (Why?)



Source link

Continue Reading

Trending