It’s a Goldilocks economy – not too hot to spur inflation, not too cool to invite recession.
On Friday, the labor department announced that the US economy added 209,000 jobs in June.
It was the 30th consecutive month of job gains. The unemployment rate dipped to 3.6%
Last Thursday we learned that the US economy grew at an annualized 2% rate in the first quarter of this year. That’s well above economists’ expectations of around 1.4%.
But if you haven’t received this news, you’re not alone. Good economic news doesn’t make it through the negative sludge of Fox News or Newsmax. It barely gets through the mainstream media.
You want some additional good news? In the four years of Donald Trump’s administration, total investment on manufacturing facilities grew by 5%. During the first two years of Biden’s administration, manufacturing investment more than doubled.
These remarkable results are the outcome of Biden policies – the Inflation Reduction Act and its green technology provisions, the infrastructure bill and the Chips Act.
What about inflation? Yes, Biden’s stimulative spending did boost prices. But the big news that’s not getting through to most Americans is that inflation has been dropping. It has declined significantly from its mid-2022 highs above 9%.
Consumer prices are now rising by about 4.9% annually – still a problem but not nearly the problem it was.
Much of the remaining inflation is due to outsized corporate profit margins. The IMF recently found that almost half the increase in Europe’s inflation over the past two years is due to rising corporate profits.
I wish Biden would make an issue of those profit margins. They’re enriching those at the top while imposing a big penalty on everyone else.
And wages? For a while, real (adjusted for inflation) wages were falling, but now that inflation is subsiding, real wages are picking up again.
So why do so many Americans continue to think the economy is awful?
According to the Gallup economic confidence index, Americans haven’t felt this bad about the economy since the financial crisis of 2008 and 2009. The University of Michigan’s Consumer Sentiment Index is similarly downbeat.
In an NBC News survey conducted a few weeks ago, at least 74% of Americans said the country is on the wrong track.
Given all this, it’s not surprising that Joe Biden’s approval numbers have been stuck at around 43%.
History shows that incumbent presidents tend not to be re-elected when about 70% of Americans think the country is on the wrong track. (They tend to win when fewer than half of Americans think that.)
So, the obvious question is, why are Americans feeling so bad about an economy that’s actually damned good?
One reason, I think, is a general sense of dread – centering on Trump, DeSantis and Republican lawmakers in general – that seems to affect everything else. (I don’t know about you, but I sometimes have difficulty getting to sleep, worried about the rise of authoritarian fascism in America.)
Add in the effects of the climate crisis, and you get more gloom. (This week, the earth’s average temperature reached the highest on record.) A recent study found that headlines have grown starkly more negative.
Then, too, many of us are still suffering from pandemic-related PTSD.
But I think the deeper reason Americans don’t feel very good about the economy is that is that the vast number of working non-college grads – some two-thirds of the adult US population – are still bogged down in dead-end jobs lacking any economic security, while struggling with many costs (such as housing, childcare and education) that continue to soar.
In other words, the economy is getting better overall – but overall has become a less useful gauge of wellbeing as the rich get richer, the poor grow poorer, and the working middle is under worsening siege.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
