North America

  • 2020-07-10 07:30

    By Greg Quinn

    (MNI) - Governments must keep fiscal stimulus going through the recovery from the Covid-19 pandemic, while making hard choices about ending support for industries like airlines and fossil fuels facing a long-term reduction in demand, the IMF said Friday.

    "Fiscal policy will need to remain supportive and flexible until a safe and durable exit from the crisis is secured," Fiscal Affairs Director Vitor Gaspar and Research Director Gita Gopinath wrote in a blog post.

    "It will be necessary to facilitate the transfer of resources from sectors that may permanently shrink, such as air travel, to sectors that will be expanding, such as digital services. Support should move from maintaining jobs to supporting people as they retrain or relocate across sectors.

  • 2020-07-09 12:00

    By Greg Quinn and Brooke Migdon

    WASHINGTON (MNI) - Congress should extend fiscal stimulus as damage from Covid-19 lingers while the Federal Reserve should be ready with forward guidance and expanded QE if the economy weakens further, the OECD said Thursday.

    The banking system also faces risks if stimulus is withdrawn and there is a surge in bankruptcies from highly leveraged companies, the Paris-based group said in an annual review of the world's largest economy.

    "A sharp fiscal retrenchment would be counter-productive and as such the temporary provisions in the recent tax reform should not be allowed to expire. Furthermore, automatic stabilizers and additional measures implemented as part of the crisis reaction should be allowed to play out," the OECD report said.

  • 2020-07-08 16:56

    By Brooke Migdon

    WASHINGTON (MNI) - More than one-third of U.S. households anticipate a loss in employment income in the next four weeks, led by deteriorating sentiment in the South and West following an uptick in Covid-19 cases that is triggering new businesses shutdowns.

    Approximately 35% of households expect to lose sources of income in the latest Census Bureau Household Pulse Survey, reflecting data from 250 million households across the U.S. from June 25-30.

  • 2020-07-08 14:11

    By Greg Quinn

    OTTAWA (MNI) - Following are highlights of Canadian Finance Minister Bill Morneau's speech to Parliament to deliver a fiscal snapshot Wednesday:

    Through rapid and broad support, our government has been able to protect millions of jobs, provide emergency income support to families, and help keep businesses afloat during the worst of the storm.

    This support is helping Canadians get back on their feet, and has prevented long term damage. But this pandemic is not over and we cannot let up on our commitment to one other.

    Forecasts are always uncertain. So with this Snapshot, we are providing our best prediction of the economic situation in Canada to the end of the current fiscal year, to March 31st, 2021.

  • 2020-07-08 14:11

    By Greg Quinn

    OTTAWA (MNI) - Following are highlights from the Canadian Finance Department's annual Debt Management Strategy for the fiscal 2020-21 year, published Wednesday from Ottawa:

    The current environment provides a unique opportunity for the government to issue an unprecedented level of long term bonds at historically low interest rates. This will ensure Canada's debt remains affordable and is less vulnerable to increases in interest rates for future generations.

    In pursuing a historic level of issuance in long-term bonds, the government will consult over the coming months with market participants to assess the market's capacity for long-term debt.

  • 2020-07-07 15:53

    --Inflation Will Also Remain Subdued Due to Demand Shock

    Regional Federal Reserve Bank presidents Mary Daly and Tom Barkin on Tuesday highlighted risks that the U.S. job market won't return to normal and inflation will remain subdued through the Covid-19 restart.

    "I'm assuming that we will level off at some level that's not where we want it to be," because people may not visit stores and buy as much as they did before, Daly said of the labor market.

  • 2020-07-07 10:57

    By Pedro Nicolaci da Costa

    WASHINGTON (MNI) - Early hints of an economic recovery from the Covid-19-led slump are starting to peter out, Atlanta Federal Reserve Bank President Raphael Bostic said Tuesday, indicating some at the central bank are bracing for a more prolonged recession.

    More recent data suggest economic activity is "leveling off at a level lower than we were pre-crisis, which might suggest there is going to be some loss or that the time required to recover might be quite a bit longer than we might have otherwise expected," Bostic told a webinar sponsored by the Tennessee Business Roundtable.

    Until recently, Fed officials had been expressing confidence in a solid bounceback in the second half of the year after a historic second quarter downturn caused by ext

  • 2020-07-06 10:32

    --BOC Quarterly Poll Taken As Health Curbs Being Lifted

    OTTAWA (MNI) - The Bank of Canada's first quarterly business outlook published after the nadir of Covid-19 restrictions indicated companies were less pessimistic than they were during the 2008-09 recession as health lockdowns eased and governments stepped up with relief payouts.

    "Indicators of employment intentions, input price growth and credit conditions did not deteriorate as much as they did during the 2007- 09 crisis," the central bank said in a report Monday. "This is due partly to the government support offered to mitigate the impacts of the pandemic.

  • 2020-07-02 18:16

    By Evan Ryser

    WASHINGTON (MNI) - The Fed's balance sheet edged down for a third straight week as FX swaps and repos continued to roll off, Fed data released Thursday showed.

    The Fed's portfolio shrank USD73 billion to USD7.01 trillion, driven by a USD50 billion decline in FX swaps and a USD10 billion decline in repos. Usage of dollar swap lines by global central banks fell to USD225 billion from as high as USD450 billion only a month ago.

  • 2020-06-30 08:59

    By Greg Quinn

    OTTAWA (MNI) - Canada's GDP fell a record 11.6% in April and a flash estimate suggests output rose 3% in May, signaling a turnaround for the economy from Covid-19.

    The April decline was the largest in data going back to 1961 and covered all 20 major industries, Statistics Canada said Tuesday from Ottawa. Manufacturing dropped 22.5% as social distancing rules and border closures hindered production including a near total shutdown of automobile assembly. Petroleum and coal also dropped by a quarter amid a global supply glut.

    Retailing fell 22.9% with clothing stories down by two-thirds and car dealers down 41.8%. Online shopping boosted the "non-store retailers" category by 17.3%.