Inflation is an everyone problem and unemployment is a some-people problem.
Keep that fact in mind as good-to-great headline economic numbers keep rolling in and economic sentiment remains abysmal. This week, the Commerce Department reported that real GDP fell 0.4 percent in the first quarter of the year, largely because of fluctuations in inventory orders and international trade. Consumer spending and business investment both looked strong, indicating an economy growing a tad faster than it did last quarter, not one teetering on the edge. Employment data look even better: Companies added 431,000 employees to their payrolls in March, with the jobless rate falling to just 3.6 percent.
But American consumers still say that the economy is on the “wrong track” and that financial conditions are getting worse. The Commerce Department also reported that prices increased 6.6 percent year-over-year in March, the sharpest rise in 40 years, with food costs up more than 9 percent and energy costs up a whopping 34 percent. Wages, though growing at their fastest pace in decades, are not keeping up with the price increases for many Americans.
Still, is the economy now really as bad as it was in, say, 2008, when the financial system was on life support and millions of homeowners were underwater on their mortgage? Is it worse than it was in 2011, amid a profoundly unequal recovery and crisis levels of long-term unemployment? Are the problems of having too much money sloshing around more dire than the problems of having too little of it?
The answer to all of those questions might be no. Still, it is not much of a mystery as to why the economy feels so bad to so many. The direction of the economy feels uncertain. The Federal Reserve is attempting to tamp down on inflation without triggering a recession, as it has done successfully, ahem, once in the recent past, while failing several other times. Meanwhile, governors across the country are trying to stop inflation with policies that are known to gin it up, a bit like trying to douse a fire with nail-polish remover.
Beyond that, the economy feels so bad for so many because it feels so bad for so many. Downturns tend to cause concentrated economic pain for a few, leaving many others unscathed; this was true in the Great Recession and the COVID recession, as massive as they both were and as high as the unemployment rate climbed during each. Most Americans did not lose their jobs, and wealthy Americans, in particular, were unlikely to be unemployed. Everyone experienced the fear of living through an economic crisis, with many people suffering from reduced employment opportunities, lower wage growth, and so on. But the pain was uneven.
In contrast, nobody escapes inflation, even if rising prices affect some people far more than others. That includes people on fixed incomes, such as retirees. It also includes lower-income families, who have less room in their budgets to absorb higher prices, as well as fewer opportunities to cut costs by switching from nice goods to bargain-basement ones, than higher-income families do. Indeed, the lower part of the income spectrum has been experiencing higher rates of inflation than the upper part, as well as struggling with it more, dollar-for-dollar.
Today’s inflation comes on top of a long-simmering affordability crisis, too. The price of housing is sapping budgets and forcing families to make awful decisions to keep down costs: living far away from family, commuting long distances, giving up on having a third kid, renting forever instead of ever trying to buy. The costs of child care, elder care, higher education, and medical care remain outrageous as well—affecting families far up the income scale, though of course those at the bottom are the most burdened.
One good thing about this mixed, unusual economy is that it is helping the worst-off in one important way. Very low unemployment rates and outright worker shortages are leading employers to offer jobs to people who often struggle in the labor force—individuals with a felony on their record, for instance.
But it is also pushing up gas prices and grocery bills, when rent was too expensive to begin with and child care was priced like a luxury good already, and as Washington is worrying about triggering a new downturn. No wonder everyone is mad.
Rural development grants to spark Nicola Valley economy – Global News
The province announced on Friday a series of rural development grants in the Nicola Valley to support economic development and diversification.
This is the next step in the StrongerBC Economic Plan and the ongoing recovery efforts in Merritt following the floods in November last year.
“People in Merritt have been through a lot in the past year, and they know how important business recovery is for community rebuilding,” said parliamentary secretary for rural and regional development Roly Russell in a press release.
The provincial government is providing a $1-million rural development grant to the Small-Scale Meat Producers Association to build a community abattoir in the Merritt area.
This will provide meat processing and cut-and-wrap services to local farmers and ranchers.
“This project represents significant job and economic opportunities for the region, while ensuring local ranches, abattoirs and businesses are part of a strong, resilient B.C. food system,” said minister of agriculture and food Lana Popham in a press release.
“With the recent changes to B.C.’s meat-licensing system and investments in facilities like the Nicola Valley community abattoir, this revitalization of the small-scale meat industry makes it easier to produce, buy and sell B.C. meat in our rural communities, and helps strengthen our food security and food resiliency.”
The abattoir will be a government-inspected licensed facility with a full range of services to process red meat.
According to the province, local producers have been impacted by the lack of processing capacity. Julia Smith who is a pork and beef producer in Merrit is hopeful this new facility will help her business as well as other local producers.
“My partner and I moved to the Nicola Valley in 2016 planning to expand our business to meet the growing demand for well-raised, local meat. But we soon found that the processors we relied upon were not able to keep up with our production and we had to scale the business back instead of growing it.”
More than 900 people still displaced following Merritt flooding last fall
“We were on the verge of giving up. But now we are ready to press on, because this facility will allow us, and other local family farms and ranches, to grow and thrive while providing greater food security for the community.”
The province is providing a $1-million rural development grant to the Scw’exmx Tribal Council toward Gateway 286 in Merritt.
“After an unbelievable year of fires, floods, and a pandemic, we welcome the B.C. government’s $1-million grant that will bolster our rural community, support good-paying jobs and much-needed economic development,” said Spayum Holdings LP director and Scw’exmx Tribal Council Terrence (Lee) Spahan in a press release.
“The Gateway 286 project is a 30-plus-year vision of past and present Nicola Valley Indigenous Chiefs and these monies will take our commercial and tourism development one more step closer to reality. This project will enhance the experience of the [traveling] public by providing much-needed services, and it will provide good-paying jobs and entrepreneurial opportunities for the residents of the Nicola Valley.”
Meanwhile, the City of Merritt is receiving a $500,000 grant related to economic recovery for communities that were affected by the flooding. The grant will go towards completing economic development projects and initiatives to support long-term economic recovery.
This is in addition to $329,000 in provincial funding for the City of Merritt to update flood-hazard mapping and develop new flood-mitigation plans.
Anger grows over Merritt evacuations
China's Economy Contracts Sharply as Covid Zero Cuts Output – BNN
(Bloomberg) — China’s economy contracted in April, with Covid outbreaks and lockdowns dragging the industrial and consumer sectors down to the weakest levels since early 2020 as millions of residents were confined to their homes and factories were forced to halt production.
Industrial output fell 2.9% in April from a year ago, worse than the median estimate of a 0.5% increase in a Bloomberg survey of economists. Retail sales contracted 11.1% in the period, weaker than a projected 6.6% drop. The unemployment rate climbed to 6.1%, higher than the forecast of 6%.
China’s economy has taken an enormous toll from the government’s stringent efforts to keep the virus at bay. Beijing has insisted on sticking with its Covid Zero strategy to curb infections, even though the high transmissibility of omicron puts cities at greater risk of repeatedly locking down and reopening compared to earlier strains.
“Covid outbreaks in April had a big impact on the economy, but the impact is short-term,” the National Bureau of Statistics said in a statement. “With progress in Covid controls and policies to stabilize the economy taking effect, the economy is likely to recover gradually.”
China’s benchmark CSI 300 stock index was down 0.3% as of 10:04 am local time. The onshore yuan was little changed at 6.7917 per dollar. The yield on the 10-year government bonds rose 1 basis point to 2.83%.
Fixed-asset investment increased 6.8% in the first four months of the year, largely in line with projected growth of 7%, likely supported by the government’s push to expand infrastructure spending.
The economic shocks from the zero-tolerance policy have pushed China’s ambitious full-year growth target of around 5.5% further out of reach, and is weighing on the global growth outlook.
Beijing has signaled that policy makers will step up support for the economy, with Premier Li Keqiang recently urging officials to ensure stability through fiscal and monetary policy.
The People’s Bank of China took steps on Sunday to ease a housing crunch by reducing mortgage rates for first-time homebuyers. It left the interest rate on one-year policy loans unchanged on Monday, as inflation pressure and worries about capital outflows reduce the scope for more easing.
Monetary stimulus is proving less effective because of the stringent virus restrictions, with data on Friday showing businesses and consumers had little appetite to borrow in April. Credit growth weakened sharply last month, with new yuan loans sinking to the lowest level since December 2017.
(Updates with comment from statistics office)
©2022 Bloomberg L.P.
Potential of Seaweed on Economy Being Explored in Upcoming Webinar – VOCM
A webinar on the potential of seaweed as an economic driver is coming later this month.
The webinar, put together by The Laurentic Forum Consortium, will look at how coastal communities can use an abundance of seaweed to boost the economy, as seaweed is being used as fertilizer, diet supplements, bioplastics, animal feed, pharmaceutical products, and much more.
Webinar moderator and the executive director of the Canadian Centre for Fisheries Innovation, Keith Hutchings, says seaweed farming could provide opportunities in Newfoundland and Labrador.
He says if utilized correctly, communities and regions can add one more industry to help sustain them.
The webinar is taking place May 19.
The Laurentic Forum consortium invites you to join us on May 19, 2022, to discuss the tremendous opportunity and potential associated with the seaweed industry.
— Laurentic Forum (@ForumLaurentic) May 11, 2022
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