December 1, 2023

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In The News for Dec. 2: November jobs numbers out this morning

Forecasters were taken by surprise when the economy added 108,000 jobs in October.

RBC says it expects the economy added 5,000 jobs in November while the unemployment rate edged slightly higher to 5.3 per cent from 5.2 per cent the previous month.

The Bank of Canada will be paying attention to the jobs report as it gears up for its next interest rate decision on Wednesday.

The central bank’s governor Tiff Macklem has called Canada’s unemployment rate unsustainable and said it’s contributing to high inflation.

Also this …

Public Safety Minister Marco Mendicino says the federal government is preparing to consult the public on the possible creation of a foreign agent registry as a means of preventing outside interference in Canadian affairs.

The Liberals want to hear from experts and the broader public — including members of affected communities — on whether it should follow the lead of key allies including the United States and Australia in establishing a registry.

The government acknowledges that foreign governments and organizations routinely try to influence Canadian policies, officials and democratic processes in visible and legal ways, like through diplomatic channels.

But some states engage in interference to advance foreign political goals.

Public Safety Canada says that as part of these efforts, they might employ people to act on their behalf without disclosing ties to the foreign state.

Requiring these individuals to formally register with the government they are trying to influence can make such dealings more transparent, with the possibility of fines or even prison time for failing to comply.

And this too …

A new report by the Centre for Future Work found that growth in corporate profits this year compared to pre-pandemic has been concentrated in a small number of sectors where consumer prices have also risen the fastest.

Report author and economist Jim Stanford analyzed the profits of the 52 business sectors tracked by Statistics Canada, and found that just under a third of these sectors were responsible for driving overall corporate profits up. Combined after-tax profits in the 15 most profitable sectors grew by 89 per cent during the most recent 12-month period compared to the four quarters before the pandemic hit.

Meanwhile, profits in the other 37 sectors tracked by Statistics Canada fell during the same period. Among all sectors combined, profits were up almost 30 per cent.

After-tax corporate profits in 2022 so far make up 17.4 per cent of Canada’s GDP, the highest share in history, Stanford said.

The oil and gas sector tops the profitable list by far with a $38-billion increase in profits, or more than 1,000 per cent, since 2019. Other highly profitable sectors included mining, which saw profits rise by almost 700 per cent, banking, real estate, building products, motor vehicle dealers, grocery stores and food manufacturing.

In fact, the report said that large price increases on eight specific products sold or produced by those sectors accounts for more than half of overall inflation in the past year, based on Statistics Canada data.

These eight products were home fuel oil, home natural gas, gasoline, mortgage interest, groceries, home maintenance, motor vehicles and insurance, and together Stanford calculated they accounted for 3.51 percentage points of the overall October inflation rate, which was 6.9 per cent. That’s despite the fact that those eight products make up less than 30 per cent of the weight of the CPI basket as measured by Statistics Canada.

Stanford argues that this data proves rising corporate profits are the dominant cause of inflation, since those eight products alone account for more than half the percentage-point increase in the latest inflation numbers.

What we are watching in the U.S. …

WASHINGTON _ When the U.S. government issues the November jobs report on Friday, it could provide clarity on whether hiring and pay growth are gradually cooling _ a trend that the Federal Reserve sees as vital in its fight against high inflation.

In a closely watched speech Wednesday, Fed Chair Jerome Powell pointed to a robust job market as a key driver of higher prices, particularly in services industries, ranging from restaurants and health services to entertainment and pet care.

Powell said the Fed would like to see slower job growth and more modest wage gains in the coming months. The cost of such goods as used cars, furniture and appliances, Powell noted, are easing, and housing costs will likely slow next year. That leaves price acceleration in much of the economy’s vast service sector as the most likely source of persistent inflation pressures. Those price spikes, the Fed chair said, largely reflect rising pay.

“We want wages to go up strongly, but they’ve got to go up at a level that is consistent with two per cent inflation over time,” he said.

Yet for now, paycheques are growing at about a five per cent annual pace, among the fastest in decades, and about 1.5 percentage points higher than what the Fed would prefer. Wages still trail inflation, which was 7.7 per cent in October, near a four-decade high.

Job growth has slowed this year, from a monthly average of 540,000 from January through March, to 289,000 in the three months that ended in October. But that pace is still strong _ much more than the Fed would like. Powell noted in his speech Wednesday that the economy requires only about 100,000 added jobs a month to keep pace with population growth.

Any hiring above that level means that demand for workers is outpacing supply and that the job market is still running hot, said David Wilcox, a former Fed economist who is now at Bloomberg Economics and the Peterson Institute for International Economics.

Economists surveyed by data provider FactSet have predicted that employers added 200,000 jobs last month. That would amount to the lowest total since December 2020 yet would still represent a solid gain. The unemployment rate is expected to stay at 3.7 per cent, near a half-century low.

What we are watching in the rest of the world …

BEIJING _ Former NBA star Jeremy Lin, who plays for a Chinese team, was fined 10,000 yuan for “inappropriate remarks” on social media about quarantine facilities ahead of a game, China’s professional league announced Friday, as the government tries to stop protests against anti-virus controls that are among the world’s most stringent.

Also Friday, more cities eased restrictions, allowing shopping malls, supermarkets and other businesses to reopen following protests last weekend in Shanghai and other areas in which some crowds called for President Xi Jinping to resign. Urumqi in the northwest, site of a deadly fire that triggered the protests, announced supermarkets and other businesses were reopening.

Lin, a former player with the Toronto Raptors who now plays for the Loong Lions Basketball Club, made “inappropriate remarks about quarantine hotel-related facilities” where the team stayed Wednesday ahead of a game, the China Basketball Association announced. It said that “caused adverse effects on the league and the competition area.”

The ruling Communist Party is trying to crush criticism of the human cost and disruption of its “zero-COVID” strategy, which has confined millions of people to their homes. Protesters have been detained and photos and videos of events deleted from Chinese social media. Police fanned out across Shanghai, Beijing and other cities to try to prevent additional protests.

The CBA gave no details of Lin’s comments and there was no sign of them on his account on the popular Sina Weibo platform.

The Shanghai news outlet The Paper reported Lin posted a video complaining about hotel workout facilities in the city of Zhuji, south of Shanghai in Zhejiang province, ahead of games next week.

“Can you believe this is a weight room?” Lin was quoted as saying. “What kind of garbage is this?” The Paper said the video was deleted after “the situation was clarified” that the hotel was only for a brief stay required by regulations.

On Friday, there were no signs of more protests.

The government reported 34,980 infections found in the past 24 hours, including 30,702 with no symptoms.

On this day in 1969 …

Vancouver and Buffalo were awarded National Hockey League franchises.

In entertainment …

Experimental theatre director Marie Brassard says winning this year’s Siminovitch Prize serves as a sign to keep following her instincts.

The Montreal-based artist was awarded the $100,000 Canadian theatre honour on Thursday for what jurors described as “theatrical poetry.”

“I’ve always tried to be as faithful as I can be to my instincts and my desires, and to be as free as one can be, and to share that freedom with the people I’m working with,” Brassard said in an interview ahead of the announcement.

“So being recognized for the work in such a context, it’s a very pleasurable and unexpected thing for me.”

Brassard is known for work that pushes the bounds of what theatre can be, combining the physical with the digital.

She uses light, sound and video to take audiences to new places: dreamscapes, spiritual planes and liminal spaces on the border of reality.

“Marie’s work is simultaneously dreamlike, ethereal and immediate, visceral and compelling. She is renowned for her long and patient development of work, for deep listening and for bringing out the best from her collaborators,” said Guillermo Verdecchia, the jury chair.

Brassard said the $75,000 she’s to receive along with the Siminovitch will grant her more time for that long, patient process.

In addition to her cut, her chosen protege _ Philippe Boutin _ will receive $25,000.

The Siminovitch Prize rotates on a three-year cycle, recognizing professionals in the alternating fields of design, direction and playwriting.

Did you see this?

TORONTO _ Crew members of a Pivot Airlines plane that had been kept in the Dominican Republic since April have landed in Toronto and are reunited with their loved ones.

CEO Eric Edmondson said in a statement Thursday night that the crew demonstrated “incredible courage and resilience throughout the harrowing ordeal” that saw them detained for nearly eight months.

He said it has taken a heavy toll on their lives and the lives of their families.

The crew was held in the Caribbean nation on April 5 after 200 kilograms of cocaine were discovered in the plane’s avionics bay and reported to police in Punta Cana.

The two pilots, two flight attendants and one part-time maintenance engineer were jailed, then later released on bail after surrendering their passports pending further investigation.

Following the cocaine discovery, the Air Line Pilots Association, the Canadian Union of Public Employees and Unifor said their members were arbitrarily detained, threatened and prosecuted despite following Transport Canada protocols and international laws.

“Their steadfast commitment to public safety and the rule of law is a testament to the professionalism of all Canadian aircrew,” Edmondson said.

“Pivot Airlines is tremendously grateful to all those who advocated on our crew’s behalf, including CUPE, ALPA, Unifor, Senator David Wells, as well as our government partners.”

The Dominican Republic’s National Directorate for Drug Control said in an April 6 release that it found “eight black packages” in the avionics bay of a private plane bound for Toronto from Punta Cana International Airport.

It said each package contained 25 smaller packets containing cocaine.

The directorate said at the time that nine Canadians, one Dominican and one person from India were under investigation.

This report by The Canadian Press was first published Dec. 2, 2022

The Canadian Press