Brighter Together Survey open to businesses, Economic Development Lethbridge says - Lethbridge | Globalnews.ca - Global News

It’s a snapshot in time meant to support local business owners.

“We really want to get at what’s really causing pain for the industry right now and make sure that we have a clear understanding of what we need to fix.”

According to Economic Development Lethbridge CEO Trevor Lewington, the results of the Brighter Together Survey are used to advocate for policy change, develop new initiatives based on business needs and monitor trends in the data.

“We ask questions around level of investment, level of hiring. So we get a bit of a sense year to year of what’s the Lethbridge business community planning. Are they looking to grow, are they concerned about where sales and revenue are going to go,” Lewington said.

“From that we can make some decisions if there’s any advocacy work we need to do with government or if there’s any policy decisions we need to make.”

1:46 Road construction rolls on in downtown Lethbridge

Results from 2022 found 69 per cent of Lethbridge businesses surveyed felt positive about the success of their business moving forward. The executive director of the Downtown BRZ, Sarah Amies, says she hopes to see that number grow.

“It was a great thing to see last year that those responses were as heavily weighted in the positives as they were, and so we’re hoping to see more of that positive certainly as we come out of the pandemic.”

The survey runs until mid-November but some entrepreneurs, like Analog Books co-owner Penny Warris, have already completed the questionnaire and she’s encouraging others to do the same.

“Businesses, especially in the downtown core, we have to be collaborative and we have to share all of the good stuff and all of the bad stuff to make sure everybody’s on the same page.”

Results of the Brighter Together Survey will be released in late 2023 or early 2024 and will be officially unveiled at the mayor’s state of the city address.

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Brighter Together Survey open to businesses, Economic Development Lethbridge says - Lethbridge | Globalnews.ca - Global News
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Canadian economy stalls as higher interest rates weigh on growth - The Globe and Mail

The Canadian economy has stalled in recent months as higher interest rates weigh on growth, bringing the country to the brink of a mild recession.

Real gross domestic product was essentially unchanged in September, according to a preliminary estimate that Statistics Canada published on Tuesday. While the numbers will be revised on Nov. 30, GDP is on track to fall by 0.1 per cent annualized in the third quarter, following a 0.2-per-cent drop in the second quarter.

If those figures hold, Canada would post two consecutive quarters of declining GDP – what some economists refer to as a “technical recession.” Output would also be considerably weaker than the Bank of Canada’s most recent projection, published last week, which expected 0.8-per-cent growth in the third quarter.

The numbers provide further evidence that Canada’s economy is slowing quickly as higher interest rates curb spending and investment. The Bank of Canada has rapidly raised interest rates – its policy rate stands at 5 per cent, up from 0.25 per cent in early 2022 – to subdue the biggest inflationary surge in four decades.

But as economic activity wanes, analysts on Bay Street are increasingly convinced that the central bank is finished with its rate-hike campaign.

“This is yet one more crystal clear sign that the Bank of Canada should be done hiking,” Benjamin Reitzes, a Bank of Montreal strategist, wrote in a client note. “The potential for a second consecutive negative quarterly GDP reading will cause recession chatter to ramp up quickly. The soft economic backdrop, which still has downside, will drive inflation down over time ... it’s just a question of how quickly.”

In August, eight of 20 industrial sectors posted increases in real GDP. (The Statscan report offered detailed figures for August, but just an overall estimate for September.) Services-producing industries edged up 0.1 per cent, while the goods-producing industries fell 0.2 per cent.

Mining, oil and gas extraction jumped by 1.2 per cent in August, although this was partially a recovery from the disruption of forest fires earlier in the year. Manufacturing fell for a third consecutive month, while the hospitality sector slid by 1.8 per cent, with particular weakness at restaurants and bars.

In its latest projections, the Bank of Canada downgraded its outlook for economic growth, though officials are not predicting a recession.

“We’re expecting growth below 1 per cent for the next three, four quarters,” Bank of Canada Governor Tiff Macklem explained at a press conference last week. “Is that a recession? No, it’s not a recession. It’s low positive growth.”

Mr. Macklem said you can’t rule out “some small negative numbers” in the near future – although this wouldn’t necessarily qualify as a recession.

“When people say the word ‘recession,’ I think what they have in mind is a steep contraction in output and a large rise in unemployment. That’s not what we’re forecasting.”

Canada’s labour market has softened in recent months, as seen with declining job postings and a slower pace of hiring. Still, the unemployment rate (5.5 per cent) is low by historical standards. Statscan will publish the next results from its Labour Force Survey on Friday.

The annual inflation rate has fallen to 3.8 per cent from a peak of 8.1 per cent last summer. Despite that progress, the Bank of Canada has warned of various risks to the outlook, including volatile oil prices and sharp increases in housing costs, owing to a supply shortage.

Mr. Macklem told the parliamentary finance committee on Monday that the BoC could begin cutting interest rates before inflation returns to its 2-per-cent target. The central bank projects a return to target by mid-2025. Many analysts expect rate cuts to start sometime next year.

If GDP declines slightly for two consecutive quarters, it could lead to a hearty debate about whether Canada is in recession – particularly if the labour market continues to exhibit strength.

In 2015, for instance, Canada posted two consecutive quarters of GDP decline, owing to a plummet in oil prices that hammered Alberta’s economy. Many analysts referred to the situation as a “technical recession.”

The C.D. Howe Institute did not agree. In 2018, the think tank’s business cycle council took a final vote on the 2015 downturn and narrowly decided it wasn’t a recession. The council said the breadth of the GDP contraction was narrow and that employment rose during the period in question.

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Canadian economy stalls as higher interest rates weigh on growth - The Globe and Mail
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Canada's economy: Are we in a recession? - CTV News

OTTAWA -

The Canadian economy may have entered a technical recession as high interest rates weigh on consumer spending, preliminary data from Statistics Canada suggests.

The federal agency released its August gross domestic product report on Tuesday, which shows the Canadian economy remained flat in the month. Meanwhile, a preliminary estimate is tracking a small contraction in the third quarter.

The weaker-than-expected data is reinforcing forecasters' expectation that the Bank of Canada is done raising interest rates and sparking recession chatter.

"I don't think they are going to hike interest rates again, given how weak the economy is," said Andrew Grantham, CIBC's executive director of economics.

August marked the second consecutive month where growth remained flat, and early datasuggests the economy continued that trend in September.

For the third quarter, Statistics Canada's preliminary estimate suggested the economy shrank at an annualized rate of 0.1 per cent, which would follow a contraction in the second quarter.

A technical recession is defined as two consecutive quarters of negative growth, but economists generally look for broader-based weakness to qualify a downturn as a recession.

"The declines are still very small," said Nathan Janzen, assistant chief economist at RBC.

Grantham says it's clear Canada is "skirting a recession."

"The economy is very weak, we are stalling at a time where we haven't really felt the biggest impact yet of some of these past interest rate hikes," Grantham said.

At the same time, he cautioned against reading too much into the estimate, noting it could be revised up when the final data is released.

A recession is often associated with layoffs and a rise in unemployment as business conditions worsen. Grantham says CIBC expects the job growth to be sluggish and to trail population growth. However, layoffs have been uneven across sectors so far, he said.

"What's different from this situation compared to more typical recessions is that we are seeing layoffs in some sectors, but there are still other areas of the economy that are trying to rehire and get back to their full capacity, because they weren't able to do that after the pandemic because of labour shortages," he said.

"So what we're seeing more so than big layoffs and a rise in the unemployment rate, is maybe that the quality of employment is changing. Maybe some of the higher-paying industries are letting people go, but there are lower-paying sectors that are still trying to hire, so that protects us to a certain extent."

The report said eight out of 20 industries grew in August, while growth in services-producing sectors was offset by goods-producing sectors.

The report says higher interest rates, inflation, forest fires and drought conditions continued to weigh on the economy.

Grantham says the effect of natural disasters and weather events on growth is a reminder that climate change can feed into inflation because of supply disruptions.

"It is a supply constraint; it holds back economic activity. But at the same time, that's not necessarily a restraint in economic activity that helps get inflation under control. Actually, quite the opposite. It tends to add to inflation," Grantham said.

The details in the GDP report offer more evidence of interest rates working to slow the economy, as consumer-sensitive sectors such as retail take a hit, even as the population grows rapidly.

"The fact that you're seeing activity in those sectors soften, despite population growth, is more evidence that higher interest rates are starting to have a more significant impact on per person household spending behaviour," Janzen said.

Industries such as agriculture and forestry, manufacturing, retail and accommodation and food services shrank.

Among the industries that experienced growth are wholesale trade and mining, quarrying, oil and gas extraction.

The Bank of Canada opted to hold its key interest rate steady at five per cent at its last two decision meetings. Janzen said Tuesday's release solidifies this decision.

"This makes it more likely that they won't hike interest rates again," he said.

High interest rates are expected to continue dampening growth in the economy, particularly as more households renew their mortgages at higher rates.

A recent forecast from the Bank of Canada suggests economic growth will remain weak for the rest of the year, and into 2024.

The pullback in spending caused by higher borrowing costs is supposed to help cool high inflation, which was sitting at 3.8 per cent in September.

The Bank of Canada expects annual inflation will return to the two per cent target in 2025.

This report by The Canadian Press was first published Oct. 31, 2023.

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America's economy is booming. Why aren't its bosses happier? - The Economist

Good news about America’s economy seems to keep rolling in. In the third quarter, gdp expanded by a barnstorming 4.9% in annualised terms. Heading into earnings season, the month or so each quarter when most firms report their latest results, a stream of upbeat economic figures led stockmarket analysts to hold their profit expectations for the quarter steady, rather than trim them like normal. Many called the end of America’s corporate-earnings recession. Such optimism now looks justified. Following a hat-trick of consecutive year-on-year quarterly profit declines, America Inc’s bottom line is growing again (see chart 1). According to FactSet, a data provider, of the half of big firms in the S&P 500 index that have reported their results, 78% have beaten profit expectations (see chart 2).

image: The Economist

Yet the mood during the quarterly carnival of conference calls has hardly been celebratory. Plenty of bosses failed to excite investors despite bringing them sound results. The reaction to the performance of big tech was particularly discordant. Alphabet, the parent company of Google, heartily beat profit expectations but saw its share price sink by 10% after investors were underwhelmed by how its cloud-computing division was doing. Meta’s warning on macroeconomic uncertainty meant that the social-media empire’s biggest-ever quarterly revenue figure went unrewarded by markets. The lingering possibility of a recession and anaemic levels of corporate dealmaking overshadowed banks’ profits from lending at higher rates of interest.

image: The Economist

Why the gloom? A boom in the third quarter notwithstanding, the future health of America’s consumer remains bosses’ biggest worry. It is easy to see why. American businesses draw more than a third of their revenues directly from domestic consumers’ pockets, according to Morgan Stanley, a bank. Shoppers have seemed indefatigable; retail sales grew by 0.7% in September, compared with August. Coca-Cola and PepsiCo both raised profit guidance for the rest of the year. But recently their growth has been the result of price rises rather than selling more fizzy drinks and snacks.

Other cracks are appearing. According to Bank of America, credit- and debit-card data show a downturn in spending in October, compared with a year ago. Earlier this month Americans with student loans had to resume debt payments after a three-year reprieve. In aggregate, spending is now growing faster than real disposable income, eating into savings. Consumers say they are gloomier about their financial situation—and who can blame them? At the same time, credit-card and car-loan delinquencies have been ticking up (see chart 3).

image: The Economist

That is worrying chief executives. UPS, a delivery firm, said consumers were spending less on goods and more on services, dampening its outlook for profits. Mattel, a toymaker which owns the Barbie brand, among other things, delivered a blockbuster quarter but its outlook for Christmas flopped. Bosses at Alphabet say the tech titan’s data showed customers hunting harder for deals and offers of free shipping for goods. On Tesla’s investor call Elon Musk bemoaned the effect of rising interest rates on consumers’ ability to afford the company’s cars. (Though, as Mr Musk also admitted, some of Tesla’s problems were manufactured: “We dug our own grave with the Cybertruck.”) Since the call, Tesla’s share price has fallen by 15%, wiping more than $100bn off its market value.

Companies are also closely watching their costs, especially for labour. Margins were boosted by cooling wage inflation across the economy. Strikes, however, remained a headache in some parts of the economy. By the end of September Hollywood writers had agreed to up pens but many automobile workers’ tools remained resolutely down. On October 25th the United Auto Workers (UAW) union struck a tentative deal with Ford, a Detroit giant, to end industrial action and increase workers’ wages.

But General Motors, another carmaker, said that the strike by members of UAW would now cost it $200m per week and withdrew its profit guidance for the year. Detroit’s big carmakers were not the only ones feeling the pressure: Illinois Tool Works, which makes car parts, cut its profit guidance. Even bosses at Delta Air Lines complained that fewer passengers were landing in Motor City.

Happenings farther afield were also weighing on bosses’ minds. A common refrain in many earnings calls was sadness at the loss of life in Israel and Gaza. Yet for now at least, conflict in the Middle East is not having large financial effects. A few firms signalled caution—Snap, a social-media firm, said some advertisers in the region paused spending as a result of the war in Gaza. But corporate America as a whole earns only a vanishingly small part of its profits in the Middle East. American bosses who examine the direct risks posed to their business by the war in Gaza are likely to conclude that they are much smaller than the costs of, say, unwinding operations in Russia, let alone the existential worries about America’s relationship with China.

By comparison, bosses were silent on a bigger long-term threat to earnings: higher interest rates. During the past year the fortunes of big business have diverged from those of smaller firms, especially ones owned by private-equity funds, as they have been largely immune to the soaring cost of capital. Bank of America reckons that more than three-quarters of debt borrowed by S&P 500 firms is both long-term and fixed-rate, compared with less than half in 2007 when ten-year Treasury bond yields last exceeded 5%. Eventually, however, big businesses’ debt piles will need to be refinanced at a higher rate of interest, which will squeeze profits. The earnings recession might have ended in the third quarter. But plenty of threats still lie ahead. ■

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America's economy is booming. Why aren't its bosses happier? - The Economist
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Israel's war economy is working—for the time being - The Economist

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Less than three weeks since Hamas plunged Israel into war, conflict is taking a toll on the country’s economy. The shekel has sunk to its lowest level against the dollar in more than a decade, prompting Israel’s central bank to sell $30bn of foreign-exchange reserves to prop up the currency. The price of insuring the country’s debt against default has rocketed. Firms from builders to restaurants have shut. On October 19th the finance ministry outlined plans to ramp up defence spending and provide for those pushed out of work. Four days later the central bank cut its growth forecast for the year from 3% to 2.3%.

Since war is not just fought by military forces, but also by economic ones, an important question hovers over all this activity. Can Israel withstand the economic pain? The country’s clashes with Hamas since withdrawing from Gaza in 2005 do not provide much of a guide. In each case billions of shekels—a mere fraction of gdp—were spent on the military and repairs. The conflicts did not pose a threat to the country’s economy, which has long had one of the highest incomes per person in the Middle East.

The scale of Hamas’s attacks on October 7th, and the likely ensuing conflict, is therefore pushing economists to the history books. In 1973 the cost of weapons and drafting 200,000 army reservists for the Yom Kippur war brought Israel to the brink of financial collapse. The country’s central bank reckons that, in 2002, a single year of intifada (Palestinian uprisings that ran intermittently from the late 1980s to the 2000s) cost 3.8% of gdp.

To dodge disaster, Israeli officials must face up to three challenges. The first is employment. There are not enough workers to support both the economy and the war. Since October 7th the armed forces have mobilised more than 360,000 reservists, or 8% of the country’s workforce—a bigger call-up than in 1973. Most have left jobs, producing an enormous hole in the economy. Worse, the recruits are some of Israel’s most productive workers. Start-Up Nation, an Israeli charity, reckons that a tenth of tech workers have been called up. Workers in the industry are a quarter more productive than the average in the oecd club of mostly rich countries. By contrast, those in the rest of the economy are two-fifths less productive. Just a handful of reservists are from ultra-Orthodox communities in which employment is shunned.

There is another source of labour shortages. Many of Israel’s low-skilled jobs are done by Palestinians from the West Bank, some 200,000 of whom work in either Israel or its settlements. But unrest in the West Bank means that many workers are not being allowed across the border, and they may begin to strike. During part of the second Palestinian intifada, which lasted from 2000 to 2005, missing Palestinian workers were one of the biggest brakes on Israeli growth, according to the imf.

Moreover, there are few workers with which to replace reservists and Palestinians, since Israel’s labour market is ultra-tight. According to the central bank, which has spent the past few months raising interest rates to cool the economy, unemployment is at 3.2%. Strict labour laws mean that firms can only hire temporary replacements for those on military duty—not an attractive option. Investors worry about capital flooding away from “Silicon Wadi” and back to its Californian namesake. Start-Up Nation reckons that 70% of tech firms are struggling to function. The risk is that, when the war finishes, there will be fewer jobs to which to return.

A second challenge for policymakers is the collapse of private consumption. Amid uncertainty and fear of repeat attacks, people have changed their consumption habits by staying at home. For nearly three weeks, restaurants and shopping malls have been empty. Those with the workers to open have discovered there are few customers. Tourism, Israel’s main business aside from tech, has screeched to a halt. Entire towns along the border with Gaza and Lebanon have been cleared out, putting a stop to economic activity. In order to support firms, all but the biggest businesses that suffer because of the war will receive covid-style grants to cover fixed costs. vat payments have been deferred. Workers who used to toil in areas now deemed unsafe will get handouts.

That brings the final challenge for Israeli policymakers: managing the fiscal costs of conflict. Rescuing businesses, paying reservists and housing the population of entire villages in hotels will take its toll. An enormous increase in defence spending will be required in order to finance a ground invasion this year, and stock Israel with enough weapons to feel secure next year.

Israel’s debt is currently at around 60% of gdp, a modest ratio for somewhere so rich. Even assuming that the war continues to the end of the year, it is forecast to rise to a mere 62%. The central bank has a healthy $170bn of foreign-exchange reserves. On top of this, America will help, assuming that President Joe Biden is able to unlock the $14bn he is asking for in military aid from Congress. Yet the longer the conflict continues, the more risks will grow. In 2024 Israel’s primary deficit is forecast to jump from 3% of gdp to 8%. The country’s economy had been on the rocks before Hamas’s attack. The government’s revenues were down by 8% in September, after a tough first eight months of the year. Now the cost of borrowing is rising and the tax base is crumbling. A longer war will mean more destruction, and reconstruction will not come cheap.

Now or never

The government will not be able to pay its way for ever, which is one reason why a chorus of local politicians insists that a ground invasion of Gaza ought to proceed straight away. Although, in the next few months, households and firms will receive generous financial support, conflict is draining labour, capital and expertise from Israel’s economy faster than it can be replaced. Other economies may have withstood far greater damage in pursuit of military victories in the past, but that will be little consolation to those forced to bear the costs in Israel this time around. ■

Read more from Free exchange, our column on economics:
Do Amazon and Google lock out competition? (Oct 19th)
To beat populists, sensible policymakers must up their game (Oct 12th)
To understand America’s job market, look beyond unemployed workers (Oct 5th)

For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter.

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Israel's war economy is working—for the time being - The Economist
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Economic growth so strong, Republicans are literally speechless - MSNBC

In recent years, as job growth has soared in the United States and the unemployment rate has dropped to levels unseen in more than 50 years, Republican leaders on Capitol Hill have responded to the news by ignoring the data. Month after month, the economy adds hundreds of thousands of jobs, and I eagerly await the reactions from GOP congressional leaders.

Invariably, the party finds itself literally at a loss for words.

It was against this backdrop that the Commerce Department released new data roughly 24 hours ago, pointing to robust economic growth in the United States over the summer (July through September). In fact, the gross domestic product reached 4.9% for the quarter — a level of growth unseen during Donald Trump’s first three years in office — exceeding expectations.

It was, by any fair measure, "stellar" news, made better when combined with recent data pointing to low unemployment and inflation rates that are dropping.

Naturally, I was curious how Republicans would respond to the news. A few options came to mind.

Maybe leading GOP officials would make the case that the robust economic recovery is nice, but President Joe Biden doesn’t deserve any credit. Perhaps they’d argue that it’s too soon to applaud good news since there’s still plenty of economic work to do. Maybe they’d argue that the United States economy is a massive beast, and it’s unrealistic to think a White House agenda is uniquely responsible for periodic shifts.

But as it turns out, Republicans went with an entirely different approach: They simply ignored the good news, as if it didn’t happen.

Senate Minority Leader Mitch McConnell didn’t bother to issue any kind of statement, and new House Speaker Mike Johnson was similarly silent — except to tell Fox News’ Sean Hannity that he believes the U.S. economy “is in the tank,” overwhelming evidence to the contrary notwithstanding.

The Republican National Committee sort of acknowledged the GDP report — it issued a statement arguing that “Bidenomics is a failure,” which appeared to be odds with the news Americans had just received — though it made no mention of the actual data.

There’s no great mystery here. Party leaders have almost certainly concluded that if they were to comment on the good news, more Americans might hear about it — and that’s the last thing the GOP wants. There’s political utility in simply looking the other way.

But the Republicans’ silence doesn’t change the fact that the latest economic data is fantastic.

This post updates our related earlier coverage.

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Economic growth so strong, Republicans are literally speechless - MSNBC
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What China's slow-motion real estate crisis means for the global economy - CNBC

China's real estate industry is collapsing in slow motion.

Major developers like Evergrande and Country Garden remain stuck in spiraling debt problems. So-called 'ghost cities' dot the Chinese countryside. And now the International Monetary Fund just cut its global growth forecasts for 2024 and called out China's real estate crisis as a big reason why.

"It's important to recognize that there is a longer-term challenge here, and that is we essentially have too large a construction sector in China, we have too large a real estate sector because underlying demand for apartments is declining," said Frederic Neumann, HSBC chief Asia economist, in an interview with CNBC. "We have slowing urbanization. We have declining demographics."

China's overall post-pandemic economic recovery has been less than stellar. Youth unemployment is at record levels, gross domestic product forecasts have been lowered and the ongoing real estate crisis has been hitting consumer confidence and foreign investment in the country.

Beijing is now attempting to alleviate the sector's pressure with several policy moves like lowering minimum down payments and allowing for the adjustment of mortgage rates. The spillover effects on the global economy, though, could create headwinds for years to come, said Neumann.

"China's shrinking real estate sector over the coming years will really have a huge impact on heavy industry, on the commodity markets globally," he said. "There's going to be less steel demand. There’s going to be less cement being used — less glass, for example. That impacts within China heavy industrial areas that really produce these raw materials."

Watch the video above to learn more about where the sector goes from here.

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What China's slow-motion real estate crisis means for the global economy - CNBC
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Bank of Canada holds interest rate as economy weakens, inflation cools | Watch News Videos Online - Global News

The Bank of Canada left its benchmark interest rate unchanged at 5.0 per cent on Wednesday, amid signs of cooling in the economy and easing in inflation. "We don't want to cool the economy more than necessary, but we don't want Canadians to have to continue to live with an elevated inflation, either. And we cannot let high inflation become entrenched in the economy," Bank of Canada governor Tiff Macklem said.

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Opinion | Why Americans still don't like Biden's economy - The Washington Post

The economy expanded at a nearly 5 percent annual rate during the most recent quarter, the Commerce Department reported Thursday. Economic growth is strong, unemployment is low, and inflation is falling. Yet people are still unhappy about the economy. Gallup’s latest numbers show only 20 percent of Americans consider the economy excellent or good, while 48 percent consider it poor.

People have tried to explain the apparent disconnect, theorizing that it’s because of misleading media “narratives” about the economy, Republican voters’ partisanship, free-floating “grumpiness” or a public desire to see prices actually fall.

The truth might be simpler: Wages haven’t kept up with prices. Average wages are down in real terms — adjusted, that is, for inflation — since President Biden took office. They are roughly 3 percent lower than their peak in April 2020.

That’s partly because real wages spiked early in the pandemic for the worst reason: Low-wage workers lost their jobs. But even when you compare wages today with the pre-pandemic trend, they are still about 2 percent lower than people had reason to expect. That’s what this graph, constructed with data provided by my American Enterprise Institute colleague Michael Strain, shows.

If that is what is weighing down public perceptions of the economy, there’s ample precedent for it. Unemployment and inflation were low in 2005 and 2006, and supporters of President George W. Bush wondered why few Americans considered the economy good or excellent. Real wages, though, were stagnating. Something similar happened under President Barack Obama. For much of his presidency, inflation was low, the economy grew, and unemployment fell. But wages were also stagnant for much of his time in office, and people rated the economy poorly.

During the past 30 years, there have been only two periods when Gallup found that most Americans considered the economy good: from late 1997 through early 2001, and from mid-2018 through March 2020. While unemployment was falling and inflation was low in both eras, that doesn’t distinguish them from other times when the public was unsatisfied with the economy. What sets the two happy periods apart is that real wages were rising to new peaks.

The pattern strongly suggests that Americans will not consider the economy to be performing well unless their paychecks rise faster than their bills. Beyond that, the data leave some questions unanswered. It might be that the public would be satisfied with inflation at its current level if wages were rising faster. Inflation over the course of the year 2000 was roughly as high as it has been in recent months, and people didn’t seem to mind.

On the other hand, Americans might be having a stronger negative reaction to today’s inflation because of its context: a multiyear uptick after decades when it was, for the most part, low. Even real wage growth, then, might not be enough to diminish our displeasure from sticker shock. Inflation is falling but still high compared with our recent experience (and to the Federal Reserve’s target inflation rate). So prices are high — the gap between the price level and its pre-pandemic path keeps increasing — and rising faster than normal. It might not be much comfort to consumers that the second derivative of prices is negative — which is what it means to say that inflation is falling.

It is probably wise to assume that when the people who make up an economy say it is not doing well, it isn’t. That’s especially true when their perception has a rational basis in data. Americans have to cast their minds back only a few years to remember what a good economy looks like, and this isn’t it.

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Opinion | Why Americans still don't like Biden's economy - The Washington Post
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Why a stellar economic report may spell peak 'Bidenomics' - POLITICO

People listen as President Joe Biden speaks about his administration's economic agenda at Prince George's Community College, Center for the Performing Arts, Sept. 14, 2023, in Largo, Md. | Alex Brandon/AP

A blowout gross domestic product report on Thursday showed the economy surged over the summer, driven in part by consumer spending.

The 4.9 percent increase in GDP is a great headline for “Bidenomics” at a time when voters just aren’t buying what the president has done for their bank accounts.

But economists predict this may be as good as it gets for the near future — and some fear it may spur the Federal Reserve to do more to slow growth and fight inflation. Here’s a breakdown:

What economists expected

It beat some economists’ expectations but fell short of others. The Federal Reserve Bank of Atlanta’s “GDPNow” model had estimated that the economy grew 5.4 percent in the third quarter.

Still, the number showed the economy expanded at its fastest rate in nearly two years.

“The U.S. economy’s resilience will likely be on full display,” Wells Fargo economists said before the release.

Along those lines, the Treasury Department released a report Thursday that said the U.S. economy has not only outperformed expectations this year but has also helped support the global outlook.

“The progress we have made on growth, labor markets and inflation stands out across the globe, and remains an important source of strength for the global economy,” Treasury acting assistant secretary Eric Van Nostrand and deputy assistant secretary Tara Sinclair said.

Sounds great! Are voters feeling it?

If they are, they’re not giving President Joe Biden much credit. His economic approval ratings are still in the red by double digits, including his handling of inflation. More than half of the people surveyed in an Oct. 21-24 Economist/YouGov poll said the economy is getting worse.

What could go wrong?

Economists are expecting growth to slow heading into next year.

Borrowing costs are rising, pandemic financial buffers are being drawn down and student loans are coming due – not to mention the hot wars playing out in the Middle East and Ukraine. The talk among CEOs is that they aren’t thrilled about what’s in store for the economy next year.

It underscores that the third-quarter GDP number may be stellar, but it’s a dated snapshot.

The question then becomes: To what extent will Jerome Powell’s data-driven Fed take action based on the new stat, which could suggest more work is needed to head off inflation? The Fed is expected to hold interest rates steady when it meets next week.

“That’s where I constantly feel this tension between the Fed having been and continuing to be extremely data dependent — and backward-looking as a result — versus what would be optimal in the current environment, which is a forward-looking perspective,” EY-Parthenon chief economist Gregory Daco said Wednesday.

The key issue, according to Daco, is whether consumers and business leaders still have the buffers they need to keep spending into 2024 amid a persistently high-cost, high-interest rate environment.

“The answer to that question, in my opinion, is no,” he said. “But depending on how you respond to that question, you’re going to want to be more or less hawkish in terms of monetary policy.”

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Why a stellar economic report may spell peak 'Bidenomics' - POLITICO
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Treasury yields rise as investors assess state of economy - CNBC

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U.S. Treasury yields rose on Wednesday, with the yield on the 10-year rate hovering below 5% but near multiyear highs, as investors considered the state of the economy.

The yield on the 10-year Treasury was up by 11 basis points at 4.954%. The yield on the 2-year Treasury was hovering near the flatline at 5.1%.

Yields and prices move in opposite directions. One basis point equals 0.01%.

Treasurys

The yield on the 10-year Treasury crossed the 5% mark on Monday, reaching levels last seen in 2007, before pulling back again slightly, while remaining near levels last seen over a decade ago.

That came as Pershing Square's Bill Ackman said Monday that he covered his bet against long-term Treasurys as he believes investors may soon seek safety in bonds as geopolitical concerns mount.

Investors have been closely following the Israel-Hamas war and assessing its impact on the global economy, especially the energy sector. However, there has not been a significant run on Treasurys since the war began — a common phenomenon during times of geopolitical crisis.

The yield on the 10-year Treasury has been steadily climbing in recent weeks and has hit several multiyear highs this month. Investors have been considering the outlook for interest rates ahead of the Federal Reserve's next policy meeting on Oct. 31 and Nov. 1.

Several Fed officials have suggested that higher Treasury yields will create tighter financial conditions, which could slow the economy. That could mean the Fed does not need to hike rates, and it prompted many investors to believe rates will be left unchanged next week.

On Wednesday, investors will be watching out for new home sales and building permits data for September, and Fed Chairman Jerome Powell is expected to give remarks.

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Treasury yields rise as investors assess state of economy - CNBC
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The Last Time US Yields Rose So Much, It Sank the Economy Twice - Bloomberg

There’s a good reason why investors are amazed that something hasn’t broken in the economy yet: The last time US government bond yields climbed so far, so fast, the nation plunged into back-to-back recessions.

The 10-year Treasury yield — a key baseline for the cost of money across the financial system — has jumped more than four full percentage points over the past three years, briefly pushing it this week over 5% for the first time since 2007. It’s the biggest increase since the run up in the early 1980s, when Paul Volcker’s efforts to slay inflation pushed the 10-year yield to nearly 16%.

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The Last Time US Yields Rose So Much, It Sank the Economy Twice - Bloomberg
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Argentine Economy Grew Again in August Despite Inflation Spike - BNN Bloomberg

(Bloomberg) -- Argentina’s economy expanded in August despite a steep currency devaluation that unleashed price spirals not seen in three decades.

Economic activity grew 1.3% in August from a month earlier, according to government data published Tuesday. From a year earlier, the gross domestic product proxy rose 0.3%, compared with economists’ median estimate for a 2.2% decline.

The upset victory of outsider Javier Milei in mid-August’s presidential primary election sent the country’s peso, bonds and stocks into free fall and prompted the incumbent government to devalue the official currency 18% and raise the key interest rate 21 percentage points. Monthly inflation in August accelerated 12.4%, a level not seen since Argentina was exiting hyperinflation in the early 1990s.

A general election Sunday saw Economy Minister Sergio Massa replace Milei on top, making for a worst-case scenario for markets ahead of the November runoff. The next government is expected to inherit a recession coupled with triple-digit inflation. 

Argentina’s gross domestic product slumped 2.8% in the second quarter, the deepest decline since the peak of the pandemic in early 2020. A record drought that wiped out $20 billion of agriculture exports and accelerated food inflation took a heavy toll on the economy. Economists surveyed by the central bank see GDP declining 2.8% this year and contracting again in 2024.

--With assistance from Rafael Gayol.

©2023 Bloomberg L.P.

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Argentine Economy Grew Again in August Despite Inflation Spike - BNN Bloomberg
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Kremlin says Russian economy ready to handle more sanctions - Al Jazeera English

Sanctions have boosted domestic industrial production, officials say.

Russia’s economy has adapted well to Western sanctions and Moscow does not fear the prospect of more such measures, the Kremlin says.

On February 25, 2022, a day after Russia undertook a full-scale invasion of Ukraine, the European Union introduced wide-ranging sanctions intended to send a clear signal to Moscow that there would be severe consequences for the war.

The bloc has imposed 11 sanctions packages to date and last week said it would work to shut down loopholes in the existing measures. EU officials have suggested the sanctions could remain in place for years.

“Russia has been living under a sanctions regime for quite a long time, for decades, and we have sufficiently adapted to it, so such time horizons as five to 10 years do not scare us,” Kremlin spokesperson Dmitry Peskov told reporters on Tuesday.

Russia said sanctions have boosted its domestic economy and industrial production.

Some observers argued that the sanctions have been circumvented and have failed to deter Russia in its war against Ukraine. According to a report by the Norway-based risk consultancy Corisk – which analysed customs data from 12 EU countries, Norway, the United Kingdom, the United States and Japan – the circumvention of export sanctions on Russia amounted to about 8 billion euros ($8.5bn) in 2022.

Western countries and Kyiv says Moscow is engaged in an unprovoked war of aggression in Ukraine. Moscow accuses Western powers of using Ukraine to try to weaken and undermine Russia’s own security.

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Kremlin says Russian economy ready to handle more sanctions - Al Jazeera English
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Opinion | The Secret of America's Economic Success - The New York Times

When Covid-19 struck, the initial economic impact was devastating. Large parts of major economies shut down, both because of official lockdowns and because people feared that in-person interaction would expose them to infection. In the United States, 20 million jobs suddenly disappeared.

At the time, there was widespread concern that the pandemic would leave lasting economic scars. After all, the 2008 financial crisis was followed by a weak recovery that left real gross domestic product in many countries far below the pre-crisis trend even a decade later. Indeed, as we approach Covid’s four-year mark, many of the world’s economies remain well short of full recovery.

But not the United States. Not only have we had the strongest recovery in the advanced world, but the International Monetary Fund’s latest World Economic Outlook also points out that American growth since 2019 has actually exceeded pre-Covid projections.

There’s a lot of terrible noneconomic news out there right now. But let’s take a moment to celebrate this good economic news — and try to figure out what went right with the U.S. economy.

It’s true that one recent poll found that a majority of Americans and 60 percent of Republicans say that unemployment is near a 50-year high. But it’s actually near its lowest level since the 1960s.

Meanwhile, retail sales are strong, and the rate at which workers are voluntarily quitting their jobs is high, which normally indicates a good labor market in which people are confident of finding new jobs.

What about inflation? When you use comparable measures, America also has the lowest inflation rate among major economies.

Can we trust government data here? I’ve been having some fun with a project called Truflation, which supposedly uses the blockchain and was backed in part by crypto types and which I suspect was intended to show that official inflation was greatly understated. What its numbers actually show is a steep decline in inflation over the past year.

U.S. economic success, then, is real, and remarkable. How did we pull it off?

Part of the answer, to be fair, is luck. Russia’s invasion of Ukraine caused a major energy shock in Europe, which had come to rely on imports of Russian natural gas. America, which exports gas, was much less affected.

A second, probably more important factor was that the United States pursued aggressively expansionary fiscal policy. In early 2021 the Biden administration enacted a very large spending bill. Many economists were extremely critical, warning that this spending would fuel inflation, which it probably did for a while. But inflation has subsided, while “Big Fiscal” helped the economy get to full employment — arguably the first time we’ve had truly full employment in decades.

A strong job market may in turn have had major long-term benefits, by drawing previously marginalized Americans into the work force. Remember the so-called great resignation? In reality, the percentage of U.S. adults in their prime working years participating in the labor force is now at its highest level in 20 years. One number I find especially striking is labor force participation by Americans with a disability, which has soared.

One last thing: When Covid struck, all advanced countries took strong measures to limit economic hardship, but they took different approaches. European governments generally paid employers to keep workers on their payrolls, even if they were temporarily idle. America, for the most part, let layoffs happen but protected workers with expanded unemployment benefits.

There was a case for each approach. Europe’s approach helped keep workers connected to their old jobs; the U.S. approach created more flexibility, making it easier for workers to move to different jobs if the post-Covid economy turned out to look quite different from the economy before the pandemic.

My conjecture — and that’s all it is — is that the U.S. approach turned out to be the right one. Covid appears to have had lasting effects on what we buy and how we work — most obviously, working from home appears to be here to stay — while high labor force participation belies fears that laid-off workers would never come back. So America’s Covid response, even though it temporarily led to high measured unemployment, may have set the stage for a strong recovery.

No doubt there were other factors behind America’s remarkable economic success story. But one thing is clear: We have been remarkably successful, even if nobody will believe it.

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.

Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.

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Opinion | The Secret of America's Economic Success - The New York Times
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Australia Gender Bias Costs Economy $80 Billion, Taskforce Says - BNN Bloomberg

(Bloomberg) -- Australia needs urgent legislative changes to end economic inequality between men and women, a government taskforce found, highlighting the problem costs the economy A$128 billion ($80 billion) a year.

Women who have at least one child earn A$2 million less over their lifetime than male counterparts, a report released by the taskforce in Canberra on Monday showed. Chaired by businesswoman Sam Mostyn, it issued a suite of immediate and long-term recommendations, including boosting government-funded parental leave.

“Gender equality is not just about women, it’s about creating communities where everyone is equal, everyone can prosper,” Mostyn told reporters.

Finance Minister Katy Gallagher appointed the 13-member Women’s Economic Equality Taskforce in 2022 to advise the government on addressing inequality. In Monday’s report, the taskforce said economic losses are largely due to “persistent and pervasive barriers” to full and equal workforce participation for women. 

The taskforce has been meeting monthly and provided formal advice on issues such as paid parental leave and the Budget. Australian workplaces will be forced to reveal their gender pay gaps for the first time in early 2024, under legislation passed earlier this year.

The report recommends doubling government-funded paid parental leave to 52 weeks and encouraging men to use the system. The taskforce called for legislation to guarantee pension payments on all forms of paid parental leave, something the government committed to but hasn’t implemented.

Australian women retire with lower pension balances than men. In the 2019-20 financial year, the median balance  — known locally as superannuation — of women 65 years and older was A$168,000 compared with A$208,200 for men. 

“The current state of women’s economic experiences clearly demonstrates economic inequality across a lifetime,” the report said.

The government is still considering the report’s recommendations, Finance Minister Gallagher said, while adding they were broadly aligned with the center-left Labor administration’s agenda. 

The data is “pretty confronting,” she said. “When it comes to economic equality, we don’t have a gender equal Australia.” 

The report found women’s earnings are reduced by an average of 55% across the initial five years of parenting a first child, while men’s earnings remained unaffected. 

It showed Australian women are much less likely to work full time than women in other developed nations, and gender segregation persists across the economy. For instance, 76.2% of health care and social assistance workers are female, while 86.5% in the construction industry are men.

“We know that women work less, they earn less, they suffer from a motherhood penalty,” Gallagher said. “We live in a highly gender segregated workforce or labor market.”

©2023 Bloomberg L.P.

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Australia Gender Bias Costs Economy $80 Billion, Taskforce Says - BNN Bloomberg
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Economy Minister Massa grabs surprise lead over right-wing populist in Argentina's presidential vote - Toronto Star

BUENOS AIRES, Argentina (AP) — Economy Minister Sergio Massa held the lead Sunday night in early results from Argentina’s presidential election, a surprise reflecting voters' reluctance to hand the presidency to his chief contender, a right-wing populist who has pledged to drastically overhaul the state.

With 86% of the votes counted, Massa had 36.2%, compared to the anti-establishment candidate Javier Milei's 30.3%, meaning the two were poised to face off in a November second round.

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Economy Minister Massa grabs surprise lead over right-wing populist in Argentina's presidential vote - Toronto Star
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Bank of Canada expected to hold key interest rate at 5% amid ‘sluggish’ economy - Global News

The Bank of Canada is widely expected to hold its key interest rate steady on Wednesday as the Canadian economy bends to higher interest rates and inflation resumes its downward trend.

The central bank held its key interest rate steady at five per cent last month but kept the door open to more rate hikes, citing concerns about the persistence of underlying price pressures.

“Economic data releases since the Bank of Canada opted to forego an interest rate hike in September have been mixed, but we expect that they on net have made a hike at next week’s decision unlikely,” RBC assistant chief economist Nathan Janzen and economist Claire Fan wrote in a client note on Friday.

The annual inflation rate rose in both July and August, while core measures of inflation — which strip out volatile prices — have not eased by much in recent months.

But the September consumer price index report helped quell some of those anxieties as the pace of price growth slowed across the economy and the annual inflation rate fell back to 3.8 per cent.

“We were kind of breathing a sigh of relief a little bit after the last inflation numbers,” said Andrew Grantham, CIBC executive director of economics.

“The recent inflation numbers suggest that it is starting to decelerate once again. And that, combined with the sluggish growth that we’ve seen, will probably keep (the Bank of Canada) on hold, not just this meeting, but really for the remainder of this year, and into next year as well.”

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The Canadian economy shrank in the second quarter. Economists anticipate that weakness will continue for the rest of the year and into 2024.

The Bank of Canada’s recent business outlook survey supported this expectation. It showed business sentiment continued to weaken in the third quarter as companies said they expect sales growth to slow over the coming year.

On the jobs front, employment continues to rise as Canada’s population continues to surge, but the job market is not as robust as it was in 2022. Job vacancies have fallen and the unemployment rate has edged higher to 5.5 per cent.

The pace of consumer spending has also slowed. New retail Canadian retail sales fell 0.1 per cent to $66.1 billion in August as sales at new and used car dealers fell for the month, Statistics Canada said Friday.

These trends are expected to continue as the effect of previous rate hikes takes hold on the economy, pinching the pocketbooks of more Canadians and businesses.

In particular, as more households renew their mortgages, the effect of higher interest rates is expected to weigh on more people.

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“We know that there’s more to come because we know that actually, fewer than 50 per cent of mortgage holders in Canada have been exposed to higher interest rates,” Grantham said.

Most economists expect these weaker economic and tighter financial conditions to eventually bring inflation back down to two per cent.

And while sticky core inflation is likely still a concern for the Bank of Canada, Grantham expects that concern to factor into the central bank’s decision on when to cut rates, rather than whether rates should rise further.

On the international front, the global economy faces some uncertainty amid the Israel-Hamas conflict, which risks destabilizing the Middle East.

“We’re seeing, globally, the risks around inflation have risen. The conflict in the Middle East, if that escalates, you know, wars are inflationary. There’s no other way around it,” Grantham said.

Central banks know all too well what wars can do to prices: the Russian invasion of Ukraine in February 2022 contributed significantly to the initial run-up in inflation as commodity prices skyrocketed.

Last week, Bank of Canada governor Tiff Macklem said it was too early to tell what the economic repercussions of the Israel-Hamas conflict may be.

“It’s far too early to tell. And it really depends on to what extent… this escalates,” Macklem said.

The Bank of Canada’s rate decision will be accompanied by its quarterly monetary policy report, which includes updated forecasts for global and domestic economies as well as for inflation.

&copy 2023 The Canadian Press

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Bank of Canada expected to hold key interest rate at 5% amid ‘sluggish’ economy - Global News
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