Growth, inflation, jobs: Biden and Trump’s economic records compared - Al Jazeera English

United States President Joe Biden and former US President Donald Trump’s first debate of the 2024 campaign has refocused attention on their respective economic records in office.

During Thursday’s head-to-head, the candidates clashed on the economy, with Biden taking credit for overseeing the recovery from the COVID-19 pandemic and Trump claiming to have presided over “the greatest economy in the history of our country”.

Both Biden and Trump could point to strong performances in particular areas of the economy, but opinion polls have consistently shown that voters have more trust in the Republican’s ability to handle economic and cost-of-living issues.

In an ABC News/Ipsos poll released last month, 46 percent of respondents said they trusted Trump on the economy, compared with 32 percent for Biden.

On inflation, Trump was favoured over the Democrat by 44 to 30 percent.

Polls also show that Americans overwhelmingly view the economy as their top priority, meaning that Biden’s re-election hopes are likely to live or die depending on his ability to sell a positive economic message.

Here are Trump and Biden’s economic records compared in four key areas.

Economic growth

Both the Biden and Trump administrations oversaw periods of robust growth.

Since Biden’s inauguration, gross domestic product (GDP) has increased by 8.4 percent when adjusted for inflation.

Under Trump, GDP grew 6.8 percent – but that includes the plunge in economic activity that occurred during the first year of the pandemic.

Excluding 2020, Biden comes out slightly ahead, with an annualised growth rate of about 2.9 percent, compared with just under 2.7 percent for Trump.

Inflation

Biden’s tenure has been marked by far higher inflation compared with Trump’s – although many of the factors driving high prices, such as COVID-related supply chain disruptions, were out of his control.

Since Biden came to office, prices have risen more than 19 percent.

The average price of a gallon (3.8 litres) of petrol rose from $2.33 to $3.76 between January 2021 and May of this year, according to the US Bureau of Labor Statistics.

The cost of a loaf of bread increased from $1.55 to $1.97, while the price of a dozen eggs jumped from $1.47 to $2.70

At a similar point in Trump’s presidency, prices had only risen about 5 percent.

While inflation has come down sharply since peaking at 9.1 percent in mid-2022, it remains stubbornly high.

The consumer price index last month stood at 3.3 percent, well above the US Federal Reserve’s target of about 2 percent.

Jobs

Biden and Trump can both claim to have presided over strong labour markets.

Unemployment fell to a 53-year low of 3.4 percent in January last year and has stayed below 4 percent for all but one month since then.

Excluding 2020, Trump also oversaw a period of low unemployment, with the jobless rate hitting a low of 3.5 percent in late 2019.

Under Biden, the economy has added about 15.7 million jobs.

By contrast, Trump left office with some three million fewer jobs – although that figure was skewed by the pandemic.

However, even before the pandemic, job creation grew at a slower pace during Trump’s administration than it has under Biden.

Wages

While Biden and Trump both presided over solid wage growth on paper, US workers have seen their earnings decline in real terms under Biden due to inflation.

Under Trump, wage growth stayed above inflation, delivering modest rises in workers’ incomes.

From March 2021, consumer prices began to diverge from earnings, before the trend started to reverse in early 2023.

The upshot is that real median weekly wages fell by 2.14 percent between the start of Biden’s term and the first quarter of 2024, according to a FactCheck.org analysis citing US Bureau of Labor Statistics data.

The positive news for US workers is that wages have started growing again.

In May, real wages rose 0.5 percent compared with the previous year, although they have yet to recover to their levels at the start of Biden’s tenure.

“While real wage growth has turned slightly positive in recent months, the level of real wages is still below where they were at the onset of the inflation surge that we began to see in the first quarter of 2021,” the Federal Reserve Bank of Atlanta said in an analysis on Thursday.

“Simply put, real wages haven’t fully caught up to the sudden burst in inflation.”

Adblock test (Why?)

Growth, inflation, jobs: Biden and Trump’s economic records compared - Al Jazeera English
Read More

Canada’s economy is showing ‘more of a pulse’ in latest GDP uptick - Global News

The Canadian economy bounced back from a soft end to the first quarter, Statistics Canada said Friday.

Real gross domestic product (GDP) grew 0.3 per cent in April, the agency said, in line with its initial estimates. Early expectations have growth holding positive in May, but easing to a rate of 0.1 per cent.

Wholesale trade, mining, quarrying, manufacturing and oil and gas extraction industries were all up in the month, StatCan said. The arts, entertainment and recreation sectors were also buoyed by four Canadian teams vying for the Stanley Cup as the NHL playoffs began in the month, the agency noted.

Construction activity meanwhile pulled back in the month after March saw the sector’s largest increase since October 2022. A slowdown in builds of new single and multi-family homes, as well as in home improvement work, contributed to the decline, StatCan said.

April figures are up from flat growth in March, as the Canadian economy got off to a hot start in 2024 but showed signs of waning at the end of the first quarter. Canada also narrowly avoided a technical recession in 2023 as elevated interest rates weighed on growth.

2:10 Canada’s economy narrowly escapes a technical recession

“After struggling to grow at all through the last three quarters of 2023, the Canadian economy is showing a bit more of a pulse so far this year,” BMO chief economist Doug Porter said in a note to clients Friday morning.

The email you need for the day's top news stories from Canada and around the world.

The Bank of Canada will be analyzing GDP results, alongside fresh data on inflation and the jobs market, as it weighs where to take its benchmark interest rate next after an initial 25-basis-cut earlier this month.

Andrew Grantham, senior economist at CIBC, said in a note to clients Friday morning that the solid GDP report puts the Canadian economy on pace for 1.8 per cent annualized growth in the second quarter, marginally outpacing the Bank of Canada’s expectations.

Trending Now

• Terrifying footage shows massive sinkhole swallow Illinois soccer field

• Using sunscreen this long weekend? Several lots recalled in Canada

But he said that the upcoming inflation and jobs reports will have a bigger say in whether the central bank delivers a second consecutive rate cut at its next decision on July 24.

Porter said that growth remains “generally lacklustre” across Canada.

He expects that will mean further rises in the unemployment rate and easing in underlying inflation heading forward, setting up the Bank of Canada for further interest rate cuts “eventually.” BMO expects the next rate cut to come at the central bank’s September meeting.

An updated economic outlook from Deloitte Canada released this week called for two more rate cuts this year with the pace of easing picking up in 2025.

2:00 Canadian mortgage renewals will weigh on economic growth: Deloitte

&copy 2024 Global News, a division of Corus Entertainment Inc.

Adblock test (Why?)

Canada’s economy is showing ‘more of a pulse’ in latest GDP uptick - Global News
Read More

Opinion: What next for Britain and its ailing economy? - The Globe and Mail

Open this photo in gallery:

Britain's Prime Minister and leader of the Conservative party, Rishi Sunak and Labour opposition leader Keir Starmer.DARREN STAPLESJUSTIN TALLIS/Getty Images

John Rapley is an author and academic who divides his time among London, Johannesburg and Ottawa. His books include Why Empires Fall (Yale University Press, 2023) and Twilight of the Money Gods (Simon and Schuster, 2017).

On Thursday, barring a failure in the polling industry on a scale not seen since the infamous 1948 “Dewey Defeats Truman” American election, Britain will install its first Labour government in 14 years. The country’s media have recently started referencing the 1993 Canadian election (that saw the Progressive Conservatives drop from 156 seats to just two) to infer that this week’s vote may become a similar “extinction event” for Britain’s Conservative Party. But even if it doesn’t, the country seems ripe for catharsis and desperately wants a fresh start.

The country is struggling, and not just at the Euros soccer tournament. Like Canada’s, Britain’s per-capita gross domestic product (GDP) is declining, though Britain’s is doing so even more sharply, with incomes lower than 15 years ago. Labour productivity is all but stagnant. The country was once a magnet for foreign investment, but since the 2016 Brexit referendum foreigners have been turning up their noses up at the U.K. And yet, despite all this stagnation, the country still has the worst inflation in the G7.

Strapped for cash by this malaise, the country’s public sector is collapsing. Schoolchildren go hungry, hospitals are crammed, the land’s rivers and beaches are swimming in raw sewage dumped by crumbling water utilities, the trains outside London often run late (if they come at all), and everyone has an anecdote of calling the police in an emergency only to be told they’re too under-resourced to show up.

Nevertheless, because the economy is squeezing the tax base, Britons are having to pay more in taxes, with the country’s burden now higher than it’s been since the 1950s, and on a path to go higher yet. Meanwhile, in much of the land, housing has become unaffordable to just about anyone who doesn’t have a bank of mum and dad on which to fall back. In short, Britons are paying more for everything, but getting less of it. Needless to say, they’re angry.

Yet while the public is hungering for a major change of direction, neither of the two major parties is offering it. The Conservative government is saying the country has turned a corner and brighter days lie ahead, while the Labour opposition is saying that they will restore growth with a bit of reform and some modest changes to the tax system.

Scarcely anyone believes this. The Institute for Fiscal Studies, Britain’s most respected independent arbiter of the government’s finances, was scathing in its assessment of the two parties’ manifestos. The next government, it said, would face a “stark choice”: raise taxes, cut spending or borrow more. Yet both parties are clinging to what the IFS calls “a conspiracy of silence,” showing an “unwillingness to face up to the real challenges” and promising lots of “essentially unfunded commitments.”

One gets the government’s cynicism. Since they are running on a record most everyone considers dreadful, they have no option but to pretend things will only get better. Besides, nobody expects them to have to keep any of their promises since it’s expected they’ll get walloped in the election.

But Labour’s silence is more puzzling. The party insists that with changes, such as planning reform, they can get the economy growing again and thereby generate the revenues needed to pay for their promises. But, while few doubt that the positive mood music around the end of Tory rule could unleash some pent-up investment, the kind of growth Labour is predicting will almost certainly prove elusive – not least because they’ve also ruled out the one measure which could most rapidly restore it, scrapping the failed Brexit deal that has knocked an estimated 4 per cent off the economy.

Once in office, therefore, Labour will almost certainly have to either break its promises and make more sweeping changes to its plans, or stick by its pledges and watch the economic funk settle deeper. Already, on the campaign trail, they’ve begun hinting that they’ll plump for Option 1, using the old line that once in office they may yet find that the government’s finances are in worse shape than they ever imagined, forcing them to scrap their manifesto pledges.

This time-worn tactic won’t cut much ice, though. Since the creation of the Office of Budget Responsibility by the David Cameron government in 2010, the government’s finances have been regularly updated for all to see. As there are few secrets now, trying this line on the British public will only worsen the low regard in which the public now holds politicians.

Labour may judge that making themselves as small a target as possible is the best way to win the election. It may be clever politics, but it’s no way to run a country. The British public has never forgiven Boris Johnson for his lies, including his assurances Brexit would make them rich. They’ll turn quickly against a Labour government that similarly takes them for fools.

Adblock test (Why?)

Opinion: What next for Britain and its ailing economy? - The Globe and Mail
Read More

Growth, inflation, jobs: Biden and Trump’s economic records compared - Al Jazeera English

United States President Joe Biden and former US President Donald Trump’s first debate of the 2024 campaign has refocused attention on their respective economic records in office.

During Thursday’s head-to-head, the candidates clashed on the economy, with Biden taking credit for overseeing the recovery from the COVID-19 pandemic and Trump claiming to have presided over “the greatest economy in the history of our country”.

Both Biden and Trump could point to strong performances in particular areas of the economy, but opinion polls have consistently shown that voters have more trust in the Republican’s ability to handle economic and cost-of-living issues.

In an ABC News/Ipsos poll released last month, 46 percent of respondents said they trusted Trump on the economy, compared with 32 percent for Biden.

On inflation, Trump was favoured over the Democrat by 44 to 30 percent.

Polls also show that Americans overwhelmingly view the economy as their top priority, meaning that Biden’s re-election hopes are likely to live or die depending on his ability to sell a positive economic message.

Here are Trump and Biden’s economic records compared in four key areas.

Economic growth

Both the Biden and Trump administrations oversaw periods of robust growth.

Since Biden’s inauguration, gross domestic product (GDP) has increased by 8.4 percent when adjusted for inflation.

Under Trump, GDP grew 6.8 percent – but that includes the plunge in economic activity that occurred during the first year of the pandemic.

Excluding 2020, Biden comes out slightly ahead, with an annualised growth rate of about 2.9 percent, compared with just under 2.7 percent for Trump.

Inflation

Biden’s tenure has been marked by far higher inflation compared with Trump’s – although many of the factors driving high prices, such as COVID-related supply chain disruptions, were out of his control.

Since Biden came to office, prices have risen more than 19 percent.

The average price of a gallon (3.8 litres) of petrol rose from $2.33 to $3.76 between January 2021 and May of this year, according to the US Bureau of Labor Statistics.

The cost of a loaf of bread increased from $1.55 to $1.97, while the price of a dozen eggs jumped from $1.47 to $2.70

At a similar point in Trump’s presidency, prices had only risen about 5 percent.

While inflation has come down sharply since peaking at 9.1 percent in mid-2022, it remains stubbornly high.

The consumer price index last month stood at 3.3 percent, well above the US Federal Reserve’s target of about 2 percent.

Jobs

Biden and Trump can both claim to have presided over strong labour markets.

Unemployment fell to a 53-year low of 3.4 percent in January last year and has stayed below 4 percent for all but one month since then.

Excluding 2020, Trump also oversaw a period of low unemployment, with the jobless rate hitting a low of 3.5 percent in late 2019.

Under Biden, the economy has added about 15.7 million jobs.

By contrast, Trump left office with some three million fewer jobs – although that figure was skewed by the pandemic.

However, even before the pandemic, job creation grew at a slower pace during Trump’s administration than it has under Biden.

Wages

While Biden and Trump both presided over solid wage growth on paper, US workers have seen their earnings decline in real terms under Biden due to inflation.

Under Trump, wage growth stayed above inflation, delivering modest rises in workers’ incomes.

From March 2021, consumer prices began to diverge from earnings, before the trend started to reverse in early 2023.

The upshot is that real median weekly wages fell by 2.14 percent between the start of Biden’s term and the first quarter of 2024, according to a FactCheck.org analysis citing US Bureau of Labor Statistics data.

The positive news for US workers is that wages have started growing again.

In May, real wages rose 0.5 percent compared with the previous year, although they have yet to recover to their levels at the start of Biden’s tenure.

“While real wage growth has turned slightly positive in recent months, the level of real wages is still below where they were at the onset of the inflation surge that we began to see in the first quarter of 2021,” the Federal Reserve Bank of Atlanta said in an analysis on Thursday.

“Simply put, real wages haven’t fully caught up to the sudden burst in inflation.”

Adblock test (Why?)

Growth, inflation, jobs: Biden and Trump’s economic records compared - Al Jazeera English
Read More

Opinion: Western floods could come again – and the consequences will be felt across the economy - The Globe and Mail

Open this photo in gallery:

Derek Clayton of the Fraser Valley Angling Guides Association takes Amritpal Grewal by boat to see his home after rainstorms lashed British Columbia, triggering landslides and floods, shutting highways, in Abbottsford, B.C., in November, 2021.JENNIFER GAUTHIER/Reuters

Alex Mitchell is the CEO of the Abbotsford Chamber of Commerce and chair of the Fraser Valley Business Coalition.

Pascal Chan is the senior director, transportation, infrastructure and construction, at the Canadian Chamber of Commerce.

In Abbotsford, B.C., and across the Fraser Valley, we remember the floods of 2021 all too well. The climate event – considered one of the most expensive natural disasters in Canadian history – devastated businesses, farms and residents, caused billions of dollars in damage, disrupted rail lines, closed part of the U.S.-Canada border and cut off access to the Port of Vancouver for nine days because of a shutdown of Trans-Canada Highway 1.

And it will happen again if the federal government doesn’t act now.

Sumas Prairie in the Fraser Valley is home to the most productive farmland in the country. The agricultural sector generates $3.83-billion in annual economic activity within Abbotsford and accounts for 23 per cent of jobs. It’s a strong and vibrant industry that supports economic growth and food security in British Columbia and Canada.

Given the economic devastation in 2021 and the almost-assured economic destruction posed by future flooding, you would expect the federal government to make the necessary infrastructure investments to secure Sumas Prairie against natural disasters.

You would be wrong.

Critical federal funding the City of Abbotsford applied for was denied earlier this month, leaving businesses and residents to wonder what will happen when the next big flood hits. Abbotsford Mayor Ross Siemens didn’t mince words when he said that a lack of action on flooding amounts to the region being “completely abandoned” by the federal government.

It’s not just Abbotsford and the residents of Fraser Valley who are being abandoned. Flooding in this region comes at an immense cost to Canada. First, there is the hit to food security. We have the responsibility and opportunity to meet global food security needs, while addressing rising food insecurity in our own country. If prime agricultural land is submerged, we can’t do either.

And then there’s the fact that Fraser Valley is a vital transportation corridor for the entire country. The stretch of Highway 1 from Langley to Chilliwack transports more than $65-billion in commercial goods a year as part of the Asia-Pacific Gateway.

Trade accounts for more than two thirds of Canada’s GDP, and our country’s ability to get goods to and from market determines whether we will be competitive in the global economy. But supply chains are only as strong as their weakest link, and ours have been under constant strain due to flooding, wildfires, blockades, the COVID-19 pandemic and repeated labour disruptions, including 35 days of uncertainty and disruption to our West Coast ports at Vancouver and Prince Rupert, which handle more than $800-million worth of cargo per day. Unreliable supply chains influence Canada’s desirability as a trading partner and a place to invest and do business.

The Fraser Valley can’t be that weak link.

Climate change means there will only be more record rainfalls here. The federal government needs to recognize the vital economic importance of Canada’s most productive farmland and act to protect it. Otherwise, Ottawa is abandoning the agricultural heart of B.C. that is a key contributor to Canadian and global food security, as well as a critical link in international supply chains.

Federal investment in infrastructure to combat natural disasters is required to ensure the agricultural region remains productive for generations to come and that Canadians in the Fraser Valley and beyond can still prosper amid the rapidly changing climate.

Adblock test (Why?)

Opinion: Western floods could come again – and the consequences will be felt across the economy - The Globe and Mail
Read More

16 Nobel Prize-winning economists warn Trump would ‘reignite’ inflation - Al Jazeera English

Joseph E Stiglitz and other Nobel laureates say former president threatens US’s standing in the world.

Sixteen Nobel prize-winning economists have signed a letter warning that the re-election of former United States President Donald Trump would harm the US economy and lead to higher prices for consumers.

In the letter released on Tuesday, the economists said that the Republican candidate would stoke instability and revive high inflation with his “fiscally irresponsible budgets”.

“Among the most important determinants of economic success are the rule of law and economic and political certainty. For a country like the US, which is embedded in deep relationships with other countries, conforming to international norms and having normal and stable relationships with other countries is also an imperative,” the letter said.

“Donald Trump and the vagaries of his actions and policies threaten this stability and the US’s standing in the world.”

The signatories also praised President Joe Biden’s record on the economy, including a “remarkably strong and equitable” recovery in the labour market since the COVID-19 pandemic.

“While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s,” the economists said.

“In his first four years as President, Joe Biden signed into law major investments in the U.S. economy, including in infrastructure, domestic manufacturing, and climate. Together, these investments are likely to increase productivity and economic growth while lowering long-term inflationary pressures and facilitating the clean energy transition.”

The signatories of the letter, which was first reported by Axios, include Columbia University Professor Joseph Stiglitz, Yale professor Robert Shiller and Sir Angus Deaton.

Trump and Biden, a Democrat, are running neck and neck in opinion polls ahead of their first presidential debate on Thursday.

Prospective voters, however, have repeatedly rated Trump as more trustworthy on the economy.

Trump has pledged to slash taxes, crack down on undocumented immigration, raise tariffs on imports and reverse many of Biden’s clean energy initiatives if re-elected to a second term as president.

In an ABC News/Ipsos poll released last month, respondents said they trusted Trump to do a better job on the economy and inflation than Biden by a margin of 14 percentage points.

Adblock test (Why?)

16 Nobel Prize-winning economists warn Trump would ‘reignite’ inflation - Al Jazeera English
Read More

India's president inaugurates newly elected parliament and sets out economic reforms as a key agenda - Toronto Star

NEW DELHI (AP) — India’s president inaugurated a new parliament on Thursday after national elections, listing the priorities of Prime Minister Narendra Modi’s government in coming years, including fast-tracking economic reforms and boosting small and medium-size enterprises to create jobs.

President Draupadi Murmu said India’s economy grew the fastest among the world’s major nations at an average of 8% over the past four years.

Already a Subscriber? Sign in

You are logged in

 Switch accounts

Adblock test (Why?)

India's president inaugurates newly elected parliament and sets out economic reforms as a key agenda - Toronto Star
Read More

China Delivers Another Economic Blow To Russia - Forbes

When Russia invaded Ukraine in February 2022, it lost access to many world markets, including much of Europe. Countries like Germany, which for years had relied on Russian gas and oil, now turned sharply away and sought to rid themselves of any vestiges of Russian dependence.

Into the breach stepped China. Always thirsty for new supplies of gas and oil, China quickly notified Russia that it was interested in receiving Russian gas and in developing a pipeline from Siberia for that gas.

Recently, however, that lifeline looks more like a noose, at least for Russia. Beijing is taking a very aggressive stance on what is to be known as the “Power of Siberia 2” pipeline, which was planned to transport a maximum annual capacity of 50,000,000 m³ of natural gas from Russia to China.

China now is demanding that it pay only Russia's heavily subsidized domestic price for the natural gas, and China will not commit to buying a substantial quantity of such gas every year.

Meanwhile, Russia's state-owned oil company, Gazprom, is hemorrhaging cash. Last year, it reported a loss of $6.9 billion, its first annual loss in 20 years. Perhaps in a sign of the difficulties regarding the negotiations, Gazprom's CEO, Alexei Miller, who had been a fixture in previous Sino-Russian talks, did not accompany Russian President Vladimir Putin on a trip to Beijing in May.

The fact that China is taking such an aggressive stance in the negotiations with Russia highlights the changing power dynamics between the two countries following Russia's invasion of Ukraine in 2022. Numerous western European countries have reduced or terminated their gas and oil dependency on Russia, the Nordstream II Pipeline has been destroyed, and much of the economic relationship between Russia and the west has dissolved altogether. Without that western economic outlet, China assumed greater significance to Russia’s economic interests.

China, however, rarely allows an opportunity to extract a price to pass by. It is playing economic hardball with Russia, and Russia has little ammunition with which to fight back. Regardless of how this negotiation turns out, the Sino-Russian relationship is changing. Vladimir Putin now knows that, notwithstanding any prior claim that with China he has a "friendship without limits." Simply put, China will not inconvenience itself to help its northern neighbor. Simultaneously, Russia's economic isolation is only deepening, and Vladimir Putin may be running out of time to reverse it.

Adblock test (Why?)

China Delivers Another Economic Blow To Russia - Forbes
Read More

Kevin O'Leary blasts Canada's 'weak leadership' amid economic uncertainty - BNN Bloomberg

Kevin O’Leary says Justin Trudeau’s Liberals have squandered Canada’s vast economic potential, and that it’s time for wholesale change within the federal government.

In an interview with BNN Bloomberg on Tuesday morning, the Canadian businessman said that Canada’s abundance of natural resources make it one of the richest nations on earth, but political leaders have done a poor job managing the country’s wealth.

“We’re such a wealthy country, and we are so poorly managed from a policy basis,” he said.

“When I think about the tremendous potential the country has in natural resources, which was the essence of its success over the last 200 years – we've ignored it.”

O’Leary said that the current federal government has instead focused on things that “have nothing to do with our core wealth,” adding that he “can't help but blame Justin Trudeau for the last decade.”

“He's a weak manager, in my opinion. A very successful politician, but a very, very weak manager,” he said.

O’Leary made a brief foray into politics himself during Trudeau’s first term, entering the race to become the leader of the federal Conservative Party in January of 2017.

However, he dropped out a few months later, saying he didn’t think he would garner enough support in Quebec to beat Trudeau in a 2019 election, and officially endorsed Maxime Bernier, who lost his leadership bid narrowly to Andrew Scheer.

Foreign investment, capital gains

O’Leary argued that Canada should be attempting to lure foreign investment from corporations and sovereign wealth funds in order to inject jobs and capital into the Canadian economy, but current policies make investing in the country unattractive.

“We've done a very poor job of that and we've made the policy so poor in terms of attracting capital for these massive projects that they just don't come anymore,” he said.

“Our own pension plans go and invest in natural resources outside of Canada. It's just shameful. It's a real problem… I'm hoping there will be a change in policy in this country because I would love to invest more in it, I just find it impossible to do so.”

When it comes to taxation, O’Leary said the proposed change to Canada’s capital gains tax, which officially came into effect on Tuesday, is “an absolute mistake.”

“When you mess around with corporate tax rates, corporations are not people, they can move. Structures can move, and they will,” he said.

“They'll contort themselves if all of a sudden they find a path of least resistance somewhere else.”

Jamie Golombek, managing director at CIBC Private Wealth, told BNN Bloomberg in a Tuesday interview that for most individuals, the increase to the capital gains inclusion rate won’t impact their finances.

“For the average Canadian, this will not make any impact, whatsoever,” he said.

“You have to have over $250,000 of annual capital gains for this to actually impact you… a capital gain is the difference between the selling price of something and the cost. So typically a stock price; the proceeds plus the cost base is your capital gain.”

But O’Leary said that from a business perspective, the changes will negatively impact Canada’s ability to compete with other G20 nations for investment dollars, adding that it’s a fundamental policy misstep by Finance Minister Chrystia Freeland.

“I want to respect Freeland because she is the finance minister, but I don't know why she's the finance minister. She has no experience at this. She's never even run a bank… I don't know why she's there,” he said.

“The damage she's doing now will be felt, if it doesn't get repaired immediately, for decades. Bad managers do a lot of damage, and she is a very bad, underqualified manager.”

Leadership change 

O’Leary said that he’d like to see new elected leaders take control of Canada’s finances in order to help the country become more prosperous and competitive.

“Justin Trudeau and his cabinet have been very successful in terms of longevity, but I really believe this to be true: Canada, if you look at resources per capita, is one of the richest countries on earth, run by idiots,” he said.

O’Leary compared Canada’s approach to managing its abundance of natural resources to that of Norway’s – another major oil exporter.

He said the Scandinavian country used and contributed to its sovereign wealth fund wisely over the years, growing it to one of the largest in the world, and making Norway one of the richest nations per-capita in Europe.

“(Canada) desperately needs leadership that understands the potential of the country and what to do in terms of putting the right people in cabinet positions,” he said.

“We have unqualified, weak managers, and I mean no disrespect, but I wouldn't let them run a bodega… I think a lot of people feel this way about this country: so much potential, so squandered (with) weak leadership. Let's change it.”

Adblock test (Why?)

Kevin O'Leary blasts Canada's 'weak leadership' amid economic uncertainty - BNN Bloomberg
Read More

BoC's Macklem says Canadian economy appears to be on track for soft landing - The Globe and Mail

Open this photo in gallery:

Governor of the Bank of Canada Tiff Macklem arrives for a news conference in Ottawa, on June 5, 2024.Justin Tang/The Canadian Press

Bank of Canada governor Tiff Macklem said the Canadian economy appears to be on track for a soft landing where inflation falls back to the bank’s target without a major spike in unemployment.

At the same time, the continuing slowdown in the labour market is hitting some groups harder than others, especially new Canadians and young people, Mr. Macklem said in a speech to the Winnipeg Chamber of Commerce on Monday.

The unemployment rate in Canada has risen more than a percentage point over the past year, hitting 6.2 per cent in May, just above pre-pandemic levels. There has not been a large increase in layoffs. But businesses have pulled back on hiring as high interest rates have weighed on consumer spending and dulled corporate investment.

“This is the soft-landing scenario,” Mr. Macklem said. “It has always been a narrow path, and we have yet to fully stick the landing. Looking forward, the unemployment rate could rise further. … But we continue to think that we don’t need a large rise in the unemployment rate to get inflation back to the 2-per-cent target.”

The speech comes two weeks after the bank lowered its policy interest rate to 4.75 per cent from 5 per cent, the first rate cut in four years.

Mr. Macklem offered few hints about the timing of further rate cuts. But his focus on how the labour market has come into “better balance” suggests policy makers are increasingly comfortable that inflationary pressures are easing.

The rapid pace of wage growth, which can feed into inflation as companies raise prices to cover costs, remains a concern. Average hourly wages were up 4.7 per cent year-over-year in April compared to an inflation rate of 2.7 per cent. Mr. Macklem said he “will be looking for wage growth to moderate further.”

However, he also said the bank is focusing on certain measures of wage growth that have slowed more than the overall rate. That suggests the bank may be less concerned about wage pressures than markets expect.

“Ultimately, the Bank of Canada seems content with the progress on the labour market, although they want to see more of it,” Desjardins economist Tiago Figueiredo wrote in a note to clients about the speech.

“Barring any major surprises, we continue to see the Bank of Canada cutting rates by another 25 basis points in July,” Mr. Figueiredo wrote, noting that the bank will receive two key pieces of economic data this week – the May inflation numbers on Tuesday and the April GDP numbers on Friday.

While the speech highlighted the “smooth” labour market cooling – companies have stopped posting jobs instead of laying people off outright – Mr. Macklem said the slowdown in hiring has hit young people and new Canadians particularly hard.

“With fewer job vacancies, it’s taking longer for young people entering the labour market to find a job, and their unemployment rate has risen. It’s now about 2 percentage points above its pre-pandemic average,” he said.

Likewise, job creation has failed to keep pace with the historic level of immigration over the past year, leaving more new immigrants without work.

This dynamic could help explain growing signs of financial stress among renters, who are often younger workers and newcomers. While mortgage delinquency rates remain relatively low, late payments on credit cards and auto loans are above pre-pandemic levels, especially for renters.

Looking further ahead, Mr. Macklem used his podium to highlight Canada’s lagging productivity (output per worker), which he called the country’s “Achilles’ heel.”

This has become a major theme for central bank officials. Senior deputy governor Carolyn Rogers created a stir several months ago by calling poor productivity and low levels of business investment in machinery and equipment an “emergency.”

Mr. Macklem said Canada has been good at growing its economy by increasing the number of workers, but not by increasing output per worker. This needs to change for the Canadian standard of living to keep improving as the population ages and the country bumps up against the “limits” of immigration policy, he said in a news conference after the speech.

He said that politicians and policy makers need to get a grip on why business investment is relatively weak in Canada. And he offered a few ideas to improve the investment climate, including lowering interprovincial trade barriers and speeding up regulatory approvals for companies and projects.

“There are also a whole range of bigger questions that I think are going to need more thought,” he said. “The role of multinational versus home headquartered businesses. Investing in houses, investing in machinery and equipment. There are a number of big questions. I don’t have all the answers but I think we need to collectively be thinking about those.”

Adblock test (Why?)

BoC's Macklem says Canadian economy appears to be on track for soft landing - The Globe and Mail
Read More

Macklem says Canada must invest in its labour force, address productivity challenges - Financial Post

There is room for more investment in jobs — without stoking inflation, Bank of Canada governor says

Published Jun 24, 2024  •  Last updated 21 hours ago  •  3 minute read

Governor of the Bank of Canada Tiff Macklem speaks during a news conference on the Bank of Canada's rate announcement, in Ottawa on June 5, 2024. Photo by THE CANADIAN PRESS/Justin Tang

Article content

Bank of Canada governor Tiff Macklem says the country must not take its competitive labour market for granted, adding that with inflation much closer to two per cent, there is room to invest in new jobs without creating inflationary pressures.

“Beyond the near term, a healthy labour market is critical to strong non-inflationary growth in Canada,” he said on Monday during a speech at the Winnipeg Chamber of Commerce. “We have been successful at expanding our economy by growing our labour force. To sustain that advantage, we need to keep investing in an inclusive labour market, smart immigration and a strong and accessible education system.”

Advertisement 2

THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY

Subscribe now to read the latest news in your city and across Canada.

• Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, Victoria Wells and others.
• Daily content from Financial Times, the world's leading global business publication.
• Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
• National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
• Daily puzzles, including the New York Times Crossword.

SUBSCRIBE TO UNLOCK MORE ARTICLES

Subscribe now to read the latest news in your city and across Canada.

• Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, Victoria Wells and others.
• Daily content from Financial Times, the world's leading global business publication.
• Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
• National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
• Daily puzzles, including the New York Times Crossword.

REGISTER / SIGN IN TO UNLOCK MORE ARTICLES

Create an account or sign in to continue with your reading experience.

• Access articles from across Canada with one account.
• Share your thoughts and join the conversation in the comments.
• Enjoy additional articles per month.
• Get email updates from your favourite authors.

Sign In or Create an Account

or

Article content

Macklem said the pandemic severely disrupted the labour market, with the unemployment rate rising to a bit more than 14 per cent in May 2020. This was followed by the re-opening of the economy two years later, which led to record-low unemployment and a high job vacancy rate.

These dynamics have caused elevated wage growth that has still not fully gone away. Prior to the pandemic, the average year-over-year growth in unit labour costs was 1.9 per cent; today, it’s 5.4 per cent. Wage growth continued to be a top upside risk for some members of the Bank of Canada‘s governing council before the rate cut earlier this month.

“The fact that wages are moderating more slowly than inflation is not surprising; wages tend to lag adjustments in employment,” Macklem said. “Going forward, we will be looking for wage growth to moderate further.”

The unemployment rate was 6.2 per cent in May, but that rate is much higher for those aged 15 to 24 and newcomers at 12.7 per cent and 11.7 per cent, respectively.

Macklem said these workers are feeling the effects of slower growth more acutely, but it also means there may be some slack in the labour market.

Top Stories

Get the latest headlines, breaking news and columns.

By signing up you consent to receive the above newsletter from Postmedia Network Inc.

Article content

Advertisement 3

Article content

“That suggests the economy has room to grow and add more jobs without creating new inflationary pressures,” he said.

Macklem also highlighted Canada’s productivity problem. His remarks come just a few months after senior deputy governor Carolyn Rogers said the country’s productivity growth issue is reaching emergency levels.

Gross domestic product growth continues to be weaker here than in the United States, and Canada has struggled to increase its economic output per worker.

Recommended from Editorial

1. 

   Bank of Canada governors were in agreement on June cut

2. 

   Poor economy means Bank of Canada has to keep cutting rates

Canada does a better job at growing its economy by adding jobs, but that is not enough to fix its productivity problem, which comes from weaker investment in intellectual property, resulting in fewer innovations, less investment in machinery and equipment, and investing less per worker than the U.S.

“The deeper question is why have we had systemically less investment in Canada than the United States?” Macklem said. “Or, to put the question in the positive: how do we make Canada more investable? Finding answers to these questions is critical if we want to increase the non-inflationary growth rate of the economy and raise the standard of living of Canadians.”

Advertisement 4

Article content

Speaking to reporters following his speech, Macklem highlighted that Canada’s regulatory regime remains an impediment for international investors and suggested getting rid of interprovincial trade barriers.

“We have too many small differences between provinces and the regulations of goods and services and the accreditation of different types of workers,” he said. “I’m not pretending it would be easy, but we created these barriers, we could get rid of them.”

• Email: jgowling@postmedia.com

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

Article content

Share this article in your social network

This Week in Flyers

Adblock test (Why?)

Macklem says Canada must invest in its labour force, address productivity challenges - Financial Post
Read More

Bank of Canada: economy can add jobs and growth even as inflation slows - Reuters.com

[unable to retrieve full-text content]

Bank of Canada: economy can add jobs and growth even as inflation slows  Reuters.com
Bank of Canada: economy can add jobs and growth even as inflation slows - Reuters.com
Read More

Newcomers, youth hit hardest as job market cools: Bank of Canada’s Macklem - Global News Toronto

The Bank of Canada’s Tiff Macklem says the path back to the central bank’s two per cent inflation target appears close to the coveted “soft landing,” but he also warns consequences of the cooling labour market have not been spread equally.

Macklem spoke about the health of Canada’s jobs market in a speech to the Winnipeg Chamber of Commerce on Monday afternoon.

His talk came a few weeks after the Bank of Canada delivered its first interest rate cut in more than four years, a major shift in monetary policy after more than two years of tightening that saw the Canadian economy slow.

As part of that cooldown, the unemployment rate rose to 6.2 per cent as of May, up from 4.8 per cent in July 2022 — the lowest point since at least the 1970s.

Rather than a correction that sees waves of Canadians losing their jobs, the rise in unemployment has come alongside a decline in vacancies and a rapidly growing population.

Inflation has come down too, last clocking in at 2.7 per cent in April with fresh data set to be released on Tuesday. Macklem said Monday that the economy appears to have enough “slack” where it can continue to add jobs without jeopardizing the path back to the two per cent inflation target.

2:38 Business Matters: Inflation data has big implications for Bank of Canada. Here’s what to expect

“This is the soft-landing scenario. It has always been a narrow path, and we have yet to fully stick the landing,” he said.

Breaking news from Canada and around the world sent to your email, as it happens.

“We are not yet back to two per cent, and we can’t rule out new bumps along the way. But increasingly, we look to be on our way.”

But Macklem also pointed out that while the overall labour force cooling has been “reasonably smooth” in aggregate, the data can mask worrying trends for some groups in the jobs market.

The unemployment rate for newcomers to Canada stood at 11.7 per cent in May, he noted, more than double that of the rest of the population (5.7 per cent).

It’s a similar situation for many Canadian youth, including new graduates. The unemployment rate stands at 12.7 per cent for those aged 15 to 24, well above the rate of 5.2 per cent among 25-to-54-year-olds and two percentage points higher than the pre-pandemic average for the group.

Because employers are hiring less in the slowdown, it’s harder for workers to find their first jobs, Macklem explained. That disproportionately hurts newcomers, young workers and recent graduates, and means the jobless rates here are rising much faster than the rest of the workforce who have more established careers.

1:57 1 in 4 Canadians living in hidden poverty: Food Banks Canada report

Trending Now

• Capital gains changes have Canadians rushing to get ‘affairs in order’

• Florida Panthers defeat Edmonton Oilers to win Stanley Cup

“Integrating into the Canadian economy is becoming more difficult,” Macklem said of newcomers taking longer to find jobs. He said the federal government likely “has room” to slow the pace of growth in non-permanent residents without driving labour shortages.

Macklem conceded that labour market adjustments are “never evenly distributed,” adding that the Bank of Canada’s policy rate can’t target “specific parts” of the workforce.

“But the slowdown in hiring has led to increases in unemployment for younger workers and newcomers to Canada. These workers are feeling the effects of slower growth more than others, and we need to recognize this,” he said.

Macklem also had praise for Canada’s immigration system on Monday. He told reporters after his speech that Canada “does a pretty good job” of bringing in workers who can “integrate relatively quickly into the labour market.”

But there are “limits” to how quickly Canada can absorb newcomers into the economy, Macklem said.

“I think the message here is, ‘Look, this has been a big success for us, it’s been a real strength.’ Let’s not lose sight of that. Let’s make sure we’re focused on smart immigration policy going forward,” he told reporters.

“It’s been a key source of growth to Canada. Let’s keep it that way.”

Are you a new graduate, young Canadian or newcomer struggling to find an entry-level or summer job? Use the contact form below to share your story, and we may be in touch for future articles.

More on Money

&copy 2024 Global News, a division of Corus Entertainment Inc.

Adblock test (Why?)

Newcomers, youth hit hardest as job market cools: Bank of Canada’s Macklem - Global News Toronto
Read More