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Why the economy could make or break Biden's presidency – CNN

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Now with President Joe Biden in the White House, it looks as though politics may be returning to a degree of normalcy. Americans’ views on the economy could once again tell us who is going to hold congressional power after the midterms.
Recent polls show a high correlation with how voters feel about Biden’s performance on the economy and how they intend to vote in the 2022 midterms. Polls from AP-NORC, Fox News and NPR/PBS NewsHour/Marist all have Biden’s approval rating on the economy in the low 50s with a disapproval rating in the mid-to-high 40s. The average gap was about 4 points.
Polling also shows that Democrats have around a 4-point advantage over Republicans on the generic congressional ballot.
When you examine individual demographic groups, you see how closely the two questions are related.
A Quinnipiac University poll from May showed that Biden’s net approval rating (approval – disapproval) on the economy differed from the margin on the generic congressional ballot by a median of just 4 points across more than a dozen demographic and political groups.
Right now, this puts Biden and the Democrats in a decent position. It’s hardly a secure one, however. Things can certainly shift in the next year. (I’m betting on it.)
Additionally, a 4-point advantage on the generic ballot may not even be enough to hold on to the House given potential polling errors. Even if the current polling were perfect and held through the midterms, the upcoming redistricting process could possibly allow for Republicans to gain a majority in the House without improving their position in the national vote.
We shouldn’t be too surprised that voters’ views on Biden’s economic standing and their political preferences ahead of 2022 are clearly correlated. Normally, when Americans like a president’s economic performance, they are more likely to reward (or at least not punish) his party in the midterms.
George W. Bush in 2002 was the last president before Trump whom more voters approved than disapproved of on the economy in a midterm cycle. Bush’s Republican Party in 2002 defied the history of a president’s party losing seats in the midterm.
Before Bush in 2002, Bill Clinton’s Democratic Party picked up seats in the 1998 midterm election. Again, many more voters approved than disapproved of Clinton’s economic performance.
Bush (in 2006) and Clinton (in 1994) were far less fortunate in their other midterm election. Both of them saw their party’s lose the House and the Senate. Both had disapproval ratings on the economy above their approval ratings.
Indeed, it is worth remarking how much of an outlier Trump was when it came to the economy and midterm elections.
Outside of Trump, previous major midterm losses have been associated with presidents who rated poorly on the economy: Lyndon Johnson in 1966, Gerald Ford in 1974, Ronald Reagan in 1982, Clinton in 1994, Bush in 2002 and Barack Obama in both 2010 and 2014.
Now, it wasn’t the case that in all of these midterms that it was the economy that did the president’s party in. The Watergate scandal, for instance, had a lot to do with the Republican Party’s problems in 1974. Likewise, voter response to Bush’s handling of 9/11 likely played a big role in how well Republicans did in 2002.
Still, it’s clear that Trump broke the mold. Biden could break it too, but I’m less inclined to think he will.
One big reason why is the economy is simply rated as a more important issue now than it was in either 2018 or in 2020.
Economic problems are currently rated as — or tied for — the nation’s most important problem in polling from Fox News and Gallup. Back in 2018, the economy regularly ran a distant second or third for the nation’s most important problem. In the leadup to the 2020 election, the coronavirus was seen as the nation’s problem. In Gallup’s most recent poll, less than 10% of Americans listed it as the nation’s most important problem for the first time in over a year.
Put another way, there was a lot more going on than just the economy with Trump. Voters didn’t judge Trump just on his economic record, but also on how they felt he was acting in the Oval Office. In Gallup polling, poor leadership consistently beat out the economy as one of the nation’s most important problems during Trump’s time in office.
With Biden and the Democrats, on the other hand, the economy is more likely to make or break them. A derailed recovery could lead to a Republican resurgence next year. A strong recovery could be the way the Democrats hold onto power.

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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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 Press. All rights reserved.

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Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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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.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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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.

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