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White House economic advisers express contradictory tones on economic impact of coronavirus – CNN

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“This is the biggest negative shock that our economy, I think, has ever seen. We’re going to be looking at an unemployment rate that approaches rates that we saw during the Great Depression,” Hassett told ABC’s “This Week.” “During the Great Recession, remember that was a financial crisis around 2008, that we lost 8.7 million jobs and the whole thing. Right now, we’re losing that many jobs about every 10 days.”
While some private economists have projected unemployment at that level, it is striking that such a prediction is coming from a key White House economic adviser.
For the fifth week in a row, millions of American workers applied for unemployment benefits, seeking financial relief as businesses remained shuttered due to coronavirus.
First-time claims for unemployment benefits totaled 4.4 million in the week ending April 18, after factoring in seasonal adjustments, the US Department of Labor said.
Without those adjustments — which economists use to account for seasonal hiring fluctuations — the raw number was 4.3 million.
Hassett painted a dire economic picture for the coming months as a result of Covid-19’s impact on the nation’s businesses, predicting a negative upcoming report on the country’s economic output.
Colorado governor says he's worried about possible second spike in Covid-19 cases as state set to reopen Monday
“I think GDP (Gross Domestic Product) growth in the second quarter is going to be negative big number. Wall Street estimates are 20, negative 20, negative 30% at an annual rate. And so that’s because we’ve done something that’s really unprecedented, we basically stopped everything,” Hassett told reporters.
On Wednesday, the Commerce Department will release the nation’s first quarter GDP which will show the initial economic downturn due to the coronavirus. Those figures will show the start of the economic slide, but the major impact will be seen in the numbers reflecting the second quarter GDP, which will be released in July.
An aggrieved Trump blames press for furor over disinfectant commentsAn aggrieved Trump blames press for furor over disinfectant comments
Treasury Secretary Steven Mnuchin, meanwhile, painted a more positive outlook. He told reporters Sunday that he believes the economy will begin to bounce back in mid-to-late summer because of the economic activity that he hopes will occur in May and June, as some states begin to reopen.
“This is an unprecedented situation. This is not a financial crisis, this is — we shut down,” Mnuchin told reporters at the White House. “The traditional economic models may work. They may not work.”
“What I do think is, as we open up the economy in May and June, you will begin to see the economy bounce back in July, August, September,” he also said. “And my expectation is that you’ll see an increasing rate of growth in those three months.”

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Don’t Lose the Thread. The Economy Is Experiencing an Epic Collapse of Demand. – The New York Times

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Despite it all — a nation on edge, with an untamed pandemic and convulsive protests over police brutality — for the first time in three months there is a scent of economic optimism in the air.

Employers added millions of jobs to their payrolls in May, and the jobless rate fell, a big surprise to forecasters who expected further losses. Businesses are reopening, and the rate of coronavirus deaths has edged down. The Trump administration has begun pointing to what are likely to be impressive growth numbers as the economy starts to pull out of its deep hole.

All of that is good news, and far better than the alternative of a continuing collapse in economic activity. But it also creates a risk: distraction and complacency.

You can already sense in the public debate over the economy that people are starting to lose the thread — viewing the slight rebound from epic collapse as a sign that a crisis has been averted. That certainly is the kind of optimism evident in the stock market, which is now down a mere 1.1 percent for the year.

But there are clear signs that the collapse of economic activity has set in motion problems that will play out over many months, or maybe many years. If not contained, they could cause human misery on a mass scale and create lasting scars for families.

The fabric of the economy has been ripped, with damage done to millions of interconnections — between workers and employers, companies and their suppliers, borrowers and lenders. Both the historical evidence from severe economic crises and the data available today point to enormous delayed effects.

“There’s a lot of denial here, as there was in the 1930s,” said Eric Rauchway, a historian at the University of California, Davis, who has written extensively about the Great Depression. “At the beginning of the Depression, nobody wanted to admit that it was a crisis. The actions the government took were not adequate to the scope of the problem, yet they were very quick to say there had been a turnaround.”

Though it may not attract the attention that reopening beaches and a soaring stock market might, the evidence is everywhere if you look closely.

Consider those seemingly great new employment numbers. It is clear that many workers who were temporarily laid off in March and April returned to work in May, such as employees at once-closed restaurants that opened up, or construction workers who returned to job sites.

But it still left the economy with 19.55 million fewer jobs than existed in February. And the rebound came in part thanks to more than $500 billion in federal aid to small businesses offered on the condition that workers be retained, under the Paycheck Protection Program.

Other data points to a severe but slower-moving crisis of collapsing demand that will affect many more corners of the economy than those that were forced to close because of the pandemic.

New orders for manufactured goods, for example, remained in starkly negative territory in May, according to the Institute for Supply Management; its index came in at 31.8, far below the level of 50 that is the line between expansion and contraction.

And despite the net gain in employment in May, there have been many announced layoffs at companies outside sectors directly affected by the pandemic. This suggests that the forced shutdown of travel, restaurant and related industries is rippling out into a broad-based shortage of demand in the economy.

Consider just a partial list of large well-known companies unaffected by the direct first-round effects of pandemic-induced shutdowns, but which have since announced layoffs: Chevron, I.B.M. and Office Depot.

Last week, the Congressional Budget Office tried to put a number on the aggregate economic activity that will be lost over the next decade compared with what was projected at the start of the year. That number is $15.7 trillion, reflecting both less economic activity and deflationary forces that reduce prices.

That is 5.3 percent less “nominal” output, meaning not adjusted for inflation, than had been forecast. For comparison, from 2008 to 2018, total nominal output came in 6 percent below the level the C.B.O. had forecast at the start of 2008.

We know how miserable that economic crisis and sluggish recovery were, with long-term costs to earnings and well-being. The C.B.O. is now forecasting that the next decade will be nearly as bad — but emphasizes that policy choices will shape how things actually evolve.

The economy is a gigantic machine in which one person’s consumption spending generates someone else’s income. The pandemic began by crushing the economy’s productive capacity — a shock to the supply side of the economy, as many types of business activity were shut down for public health concerns.

In normal times, when there is a negative supply shock (say, a year of drought that reduces agricultural crops, or new tariffs that make imports more expensive), the pain can be intense for people in sectors directly affected, yet the economy as a whole adjusts.

But this crisis is so large and so sudden that the usual adjustment mechanisms aren’t working very well.

The people losing their jobs because of shutdowns cannot easily find new ones, because so much of the economy is shuttered at the same time. The businesses in danger of closing have cut every possible expense: A hotel isn’t going to invest in new furniture or new reservation software right now. And consumer demand for some seemingly safe goods falls because those goods are complements to the sectors that are shut down.

“Hotels are locked down, so people buy fewer cars because they don’t need to travel as much,” said Veronica Guerrieri, an economist at the University of Chicago Booth School of Business. “Restaurants are locked down, so people don’t need fancy clothes because they don’t want to go out as much.”

The result is that what started as a disruption to the supply side of the economy has metastasized into a collapse of the demand side, she and co-authors say in a recent working paper. They call it a Keynesian supply shock: an inversion of the demand-driven crisis of the Great Depression described by the great economist of that era, John Maynard Keynes.

“Demand is interrelated with supply,” said Iván Werning, an M.I.T. economist and a co-author of the paper. “It’s not a separate concept.”

The demand shock, with lagged effects, is only beginning to hurt major segments of the economy, like sellers of capital goods that are experiencing plunging sales; state and local governments that are seeing tax revenues crater; and landlords who are seeing rent payments dry up.

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  • Frequently Asked Questions and Advice

    Updated June 5, 2020

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • Will protests set off a second viral wave of coronavirus?

      Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.

    • How do we start exercising again without hurting ourselves after months of lockdown?

      Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.

    • My state is reopening. Is it safe to go out?

      States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • Should I wear a mask?

      The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


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The government can’t wave a wand and bring back industries that are semi-permanently shuttered. That original supply shock can be fixed only as public health conditions allow sports arenas and the like to reopen.

But the government can act — and has acted — to try to keep demand for goods and services at pre-crisis levels. That, in turn, can smooth the path for other sectors to grow so that there is not a prolonged depression of jobs, income and investment, with a resulting reduction in the economy’s long-term potential.

In the early phase of the crisis, Congress expanded unemployment benefits, funneled hundreds of billions of dollars toward small businesses to keep workers on their payrolls, and supported state governments, among other steps. But much of this help is scheduled to expire this summer, absent further action — and the positive jobs numbers Friday led many Republicans on Capitol Hill allied with the Trump administration to suggest that they were reluctant to do more.

It is against his backdrop that some of the most influential — and fiscally conservative — voices in economic policy are saying that further aggressive spending is needed to prevent this shock from causing long-lasting damage to the economy.

“This is the time to use the great fiscal power of the United States to do what we can to support the economy and try to get through this with as little damage to the longer-run productive capacity of the economy as possible,” Jerome Powell, the Federal Reserve chair and a longtime fiscal hawk, said at a news conference in late April.

“Please, spend wisely, but spend as much as you can!” Kristalina Georgieva, the managing director of the International Monetary Fund, implored the world’s governments at an event in May. “And then, spend a bit more for your doctors, for your nurses, for the vulnerable people in your society.”

Both the Fed and the I.M.F. more typically act as brakes on fiscal profligacy. For Mr. Powell and Ms. Georgieva to effectively beg elected officials to stop a spiraling crisis reflects the unusual circumstances of this moment and the extraordinary risk they see if government action is inadequate to the job. Their comments are the equivalent of a normally debt-averse financial adviser urging a family to borrow more money to ride out a period of illness without suffering long-term financial damage.

When the crisis we now know as the Great Depression began in 1929, President Herbert Hoover started with denial, then tried blaming other countries, then argued that there was nothing the government could really do to contain the damage.

Eventually, the Hoover administration took more aggressive action, creating a large federal program of mass employment. “He gave a speech and said that 700,000 Americans were at work on federal public works, and it was bigger than anything that had done before,” Mr. Rauchway said. “And that was true, but it was at a time when more than seven million people were out of work.”

That crisis showed how when there are profound rips in the economic fabric, repairing them isn’t a simple job, it isn’t quick, and even what seems like a huge response often isn’t enough.

It’s great that the economy is ticking up from its shutdown of March and April. And the world right now is confusing and chaotic. But that makes it all the more important not to lose focus on fundamental forces that risk holding back the economy and that, if unchecked, could mean a second lost decade in this young century.

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Seniors having big impact on local economy – Quinte News

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With June being Seniors’ Month, Quinte News is looking at the impact that those 65 and over have on our community and more specifically, on local businesses.

Close to 20% of the Quinte Region’s population falls into the senior category, with the area’s cost of living, natural amenities and sometimes slower pace to life, being attractive qualities for the area to have.

But it’s not just seniors relocating here that’s making a difference for the local economy.

Bay of Quinte Regional Marketing Board Executive Director Dug Stevenson says, there are plenty of older people who find our area attractive as a place to visit and spend some cash.

“One of the things that’s interesting is when you consider seniors’ spending”, he says.

“Of course they’re on a fixed income, but they have fewer things they need to pay for as well. They probably don’t have a mortgage anymore, the kids are probably gone and they’re not worried about paying for things like education, so they’ve probably got a bit more set aside for that leisure spending”.

Stevenson says from a travel and tourism perspective, the seniors group is actually more comparable to Millennials, who range between the ages of 22 and 38.

“A lot of them have no strings attached. They have a fixed income, but have money set aside and they know what they want to do and go do it.”, he says.

Quinte West Chamber of Commerce CEO Suzanne Andrews says seniors who live in the area have a strong impact on the economy, but not just as consumers of goods.

“They access a lot of services” she says. “Things like health services, some of which are privately owned businesses, or they go to hairdressers and restaurants. So definitely they are a huge economic factor when looking at the local economy and consumer spending in our region”.

Andrews also noted that while many seniors do move to our area to retire, not all of them want to get out of work completely, which adds to the local workforce.

“We are finding here in the Quinte Region especially, seniors are choosing to continue to work, maybe not at a full time level, but are available to work and look for positions that fit their experience and knowledge”, she says. “That’s definitely something for employers to think about”.

Morgan Foran of Meta Employment services backed that up saying they’re seeing a jump in the number of seniors looking for work as well.
“We’ve seen an increase in the last couple of years in indivuduals who either don’t want to retire, or have been in a long term position and the company is closed, but there are a lot of seasoned workers for sure that are still actively looking.
She says the modern job market can be challenging to navigate and there are some things they need to help more mature workers with.
“I think it’s just the ever changing technology” she says. “When it comes to the actual job, I think they have the expertise to do the job themselves, but it’s more the way things have changed with applying for positions and things being done online and the ways you have to apply”.
“How to look for work is how we’re helping right now”.
Meta’s Sandra Leslie added those senior workers are actually making a big difference in improving the local workforce.
“There are benefits to having seniors in the workforce”, she says, “They bring such a wealth of knowledge and experience to the position and often they act as a mentor to the younger or newer staff. That’s really important. To have those multiple generations in the workforce and the workplace, so that you have that diversity to support all of your customers and to share that knowledge”.
Meanwhile Cassandra Bonn,  a marketing Specialist with 25 years experience at ad agencies, large and small, and now employed with Quinte Broadcasting, says business owners would be wrong to ignore marketing to today’s seniors.
“Most seniors are no longer frail and dependent but instead are very active with many living in their own homes into their 90’s and continuing to work and play golf, ski, garden, and travel.   Many have more disposable income then they ever had.  Seniors are active and consistent contributors to our economy.”
When asked which media are best to reach seniors Bonn admitted a bias working at Quinte Broadcasting but says her experience shows that a combination of radio and digital marketing works best for business.
“Locally there are many great radio options, including the area’s first radio station, CJBQ-800-am, who’s programming is geared to the 55 + cohort and dominates the demographic.  Social media, such as Facebook, is also vital to a marketing strategy because more and more seniors are very active online.

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Unemployment rate hits new record even as economy adds jobs – CP24 Toronto's Breaking News

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Jordan Press, The Canadian Press


Published Friday, June 5, 2020 5:18AM EDT


Last Updated Friday, June 5, 2020 3:25PM EDT

OTTAWA – Canada’s employment minister says the federal government is rethinking a key COVID-19 benefit so workers have more incentive to get back on the job, in an effort to maintain a surprising boost in job numbers from May.

Statistics Canada reported that the country got back 289,600 jobs in May – which mirrored a similar bump in the U.S. – after three million jobs were lost over March and April and about 2.5 million more people had their hours slashed.

Provincially, Quebec led the way, gaining 231,000 jobs as it became one of the first provinces to ease restrictions, doing so just before Statistics Canada collected data the week of May 10. Ontario was the only province with losses, albeit at a slower pace than in March and April.

Combined with more people reporting getting regular hours, the agency said Canada had recovered only 10.6 per cent of employment losses and absences related to the COVID-19 pandemic.

Friday’s jobs report showed the unemployment rate in May rose to 13.7 per cent, the highest level in more than four decades of comparable data. But that’s because more people started looking for work – meaning the rate shouldn’t be taken as a sign of underlying weakness, said CIBC senior economist Royce Mendes.

The unemployment rate is a measure of the people looking for work who can’t find it, meaning it can actually decline if job-seekers give up, or increase as formerly discouraged seekers see new signs of hope.

Still, the monthly labour force survey showed that men gained back more jobs than women, resulting in a wider gender gap in employment losses as a result of COVID-19, and that the pandemic continued to disproportionately affect lower-wage workers.

To keep gains going, business and labour groups called for a revamp of the Canada Emergency Response Benefit and the employment insurance system.

The first cohort of recipients of the $500-a-week payment will max out their 16 weeks of benefits in early July. Some may qualify for employment insurance, while others may not have any work available, meaning significant drops in income that could hamper the path to recovery, said TD senior economist Brian DePratto.

The Canadian Labour Congress and Canadian Chamber of Commerce separately called for reforms to the decades-old EI system, which the Liberals determined early on in the crisis couldn’t handle the influx of jobless claims.

Employment Minister Carla Qualtrough suggested all ideas are on the table when it comes to EI, and the future of the CERB.

“As we look into the months coming … we’ve got a different goal in mind: People need to get back to work safely,” she said at a midday press conference.

“So our thinking moving forward is how do we balance a need to continue to support workers, while not disincentivizing work?”

The most recent federal figures show 8.37 million people applied for the CERB, with $43.18 billion in payments as of June 2. Qualtrough said 1.2 million recipients no longer require it, although it wasn’t immediately clear why.

The Canada Revenue Agency also said this week that almost 190,000 payments of wrongfully received benefits had been made as of June 3.

Economists had been watching the CERB numbers as a proxy for Friday’s jobs report, which set up expectations for another round of job losses.

CERB figures will continued to be watched to track possible job losses and compare it to areas where there are signs of progress, said Brendon Bernard, an economist at the Indeed Hiring Lab.

“The strength of this rebound is going to depend to a significant degree on what happens with layoffs,” he said in an interview. “We could see some areas of the economy bounce-back as shuttered sectors reopen, but if layoffs continue, then it’s going to be tough for net job gains to be particularly strong.”

The total number of unemployed Canadians doubled from February to April, a surge driven by temporary layoffs that the vast majority of workers expected to last less than six months.

At the same time, there was a spike in the number of people who wanted to work but weren’t actively looking for jobs, likely because the economic shutdown has limited job opportunities. People not actively seeking work aren’t counted in unemployment figures.

The unemployment rate for May would have been 19.6 per cent had the report counted among the unemployed those who stopped looking for work – largely unchanged since April.

Statistics Canada said lower-wage workers recovered just over one-10th of the losses they experienced in March and April. But they continued to be a higher share of people working less than half of their usual hours.

Lower-wage workers were among the first- and hardest-hit during the shutdown, largely because they worked in industries like retail, restaurants and hotels that closed early in the pandemic.

Besides seeing less improvement generally compared with men, women with children under age six saw slower job gains than those with older children.

Rebounds were also weak for students and recent immigrants.

This report by The Canadian Press was first published June 5, 2020.

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