Economists were taken aback today as 43,200 Canadian jobs were shed in October, after two months of gains. United States' numbers also released this morning show that country’s unemployment rate surpassed 10 percent for the first time since 1983.
Canadian analysts, based on the two previous months of gains, had been predicting that around 10,000 new jobs would be created in October, but results released by Statistics Canada suggest companies are still unsure about economic turnaround. Including these October numbers, Canada has lost some 400,000 jobs over the past year as the country’s unemployment rate hit 8.6 percent.
According to Statistics Cananda, most of the unemployment loss targeted part-time workers, as well as adult women and youth. Rising self-employment numbers over the past year (3.9 percent) have propped up Canada's economy, while private employment has dropped by 4.1 percent over the past year and public-sector numbers have fallen by 1.6 percent.
The United States economy in October shed 190,000 jobs, according to the Labour Department. The Associated Press points out that these October numbers represent the 22nd straight month in which the U.S. economy has shed jobs – the longest on records dating back 70 years – and that nearly 16-million Americans cannot find jobs.
View The Globe and Mail's interactive map of 2009 unemployment rates, by province and city.
The Awl, an alternative news Website, has charted the circulation numbers of major U.S.-based newspapers – The Wall Street Journal, The New York Times, Los Angeles Times, The Daily News, Washington Post and The New York Post – going back to 1990.
Read The Awl’s story: A Graphical History of Newspaper Circulation Over the Last Two Decades
Read The Awl’s associated story: How are Newspapers Reporting on Newspaper Circulation
Below: The Awl circulation chart
As the Canadian dollar inches towards parity with its U.S. counterpart, the Bank of Canada announced today it will keep the interest rate at its current unprecedented low level for the near future.
While this is good news for consumers and domestic trade, it means that the dollar will likely stay high, reducing the attractiveness of Canadian exports on the world market.
“Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures,” the Bank of Canada said in a statement. “The current strength in the dollar is expected, over time, to more than fully offset the favourable developments since July.”
The key policy rate is expected to stay at 0.25 percent until June 2010.
The Bank will update its Monetary Policy Report on Thursday, which will detail its outlooks and projections on the economy.
A joint study by the Financial Post and the Canadian Federation of Independent Business has ranked the most business-friendly cities in Canada. This year, the second year of the study, had Saskatoon take the top position.
The Canadian Federation of Independent Business ranks cities by "policy, which encompasses tax and regulatory policies; presence, which reflects the concentration of entrepreneurs and business startups; and perspective, which gauges the optimism and success of actual small business owners."
Cities in Quebec also ranked favourably along with cities in Saskatchewan in the study while Toronto was dead last, at 96. Toronto suburbs fared better, leading the National Post to call Toronto the "bedroom community of the 905." Markham ranked 33rd on the list.
High municipal taxes are a major factor determining the friendliness of cities. Toronto has a property tax rate for businsses roughly 4.5 times that of a comparable residential whereas Saskatoon's rate is 1.75 times.
According to a report released today by the Royal Bank, the Canadian economy will return to growth this fall after experiencing a drastic downfall in the last three quarters.
"Improved financial markets, low borrowing rates and fiscal stimulus have moved Canada's economy forward," said Craig Wright, senior VP and Chief Economist, RBC. "We expect that Canada's recession will turn out to be the least severe of the past three, even after the consecutive hefty drops in GDP output from late 2008 and early 2009."
The projections are based on the trends in the second quarter, which saw the slowdown of the decline. Interest rates are projected to remain low for the rest of the year, with gradual increases in 2010.
A chief driver of the North American upswing will be the automotive sector, especially the increased demand due to the cash-for-clunkers program (GM Canada announced a similar clunker campaign today). The housing market is also growing due to the low interest rates. Wholesale, retail, and manufacturing sales have also seen a modest increase in June, the first rise in 10 months, according to the report. Businesses made cuts to spending plans, but also got easier access to credit.
The full RBC report can be obtained here.
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