These are stories Report on Business is following Tuesday, Jan. 14, 2014.
Toronto the Good
One wonders if unemployment is on the radar at a Toronto city hall gripped by scandal.
According to Statistics Canada, the city’s jobless rate has climbed steadily from a three-month moving average of 7.8 per cent in the summer, through 8 per cent to 8.2 per cent in November, and, finally, 8.4 per cent last month.
But few have been talking about the unrelenting rise in unemployment to the second-highest level in Canada, held spellbound instead by the months of revelations, the antics at city hall and the endless jokes on late-night television.
Bank of Montreal’s chief economist noted the troubling increase in unemployment in a research note, though he made no reference to how the city has been sidetracked by the Rob Ford saga.
“Perhaps the quirkiest stat in the brutal Canadian employment report for December was the fact that Toronto’s unemployment rate moved above Windsor’s for the first time in a decade,” Douglas Porter said, referring to Friday’s disappointing report from Statistics Canada that showed the country lost 46,000 jobs last month as the national unemployment rate climbed to 7.2 per cent.
Toronto now stands well above the national average, second only to Ontario’s St. Catharines, and is home to almost 290,000 people who can’t find work.
That’s up by almost 11,000 people, an increase of close to 4 per cent, from a year ago.
“(Prior to the loonie’s steep ascent 10 years ago, it actually wasn’t rare at all for Toronto to have a higher jobless rate, but it’s been no contest since),” Mr. Porter said.
“Sadly, this is not really a story about a great comeback in Windsor, although a recover in the auto industry is helping give a small life to employment there,” he added.
“Instead, the bigger story is the relative deterioration in Toronto … A slowdown in home building, provincial budget restraint, manufacturing and ongoing robust population inflows have all played a part in pushing up the local jobless rate versus the rest of the country."
Ontario's jobless rate stands at 7.9 per cent.
According to the latest report from the Conference Board of Canada – keep in mind that it’s from the fall – Toronto’s economy is projected to expand by 2.7 per cent this year, 3.3 per cent next year, 2.9 per cent in 2016 and 2.4 per cent in 2017.
The same forecast calls for a jobless rate of 8 per cent this year before a gradual decline.
- Tavia Grant: Jobless rate on the rise but brighter outlook remains
- Marcus Gee: Ugly scene at Toronto council a preview of October election
- Follow our coverage of the Ford saga
JPMorgan profit slips
To borrow a literary phrase, he haunts us still.
In this case, the he is Bernie Madoff. And the haunting is of bank earnings in the United States.
JPMorgan Chase & Co. today posted a hefty drop in fourth-quarter profit to $5.3-billion (U.S.) or $1.30 a share from $5.7-billion or $1.39 a year earlier.
Several factors affected the latest quarter’s showing, including a multibillion-dollar settlement of claims related to the convicted fraudster.
Legal expenses, including those related to Mr. Madoff, hit the Wall Street giant to the tune of $1.1-billion after tax, or 27 cents a share.
“We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter,” said chief executive officer Jamie Dimon.
“We reached several important resolutions - Global RMBS, Gibbs & Bruns, and Madoff. It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward.”
Wells Fargo & Co., in turn, posted a jump in fourth-quarter profit to $5.6-billion, or $1 a share, from $5.1-billion or 91 cents, prompting chief executive officer John Stumpf to cite “another outstand year in 2013, including strong growth in loans and deposits, and double-digit growth in earnings.”
Home prices rise
Canadian home prices are back at a record high.
Prices rose 0.1 per cent in December from November, according to the Teranet-National Bank house price index, effectively bringing national prices back to their October highs.
Here’s how prices compare, according to the index released today.
- Calgary, down 0.3 per cent on the month and up 6.5 per cent from a year earlier.
- Edmonton, up 0.6 per cent and 3.6 per cent.
- Halifax, down 1.2 per cent and up 0.4 per cent.
- Hamilton, down 0.6 per cent and up 3.7 per cent.
- Montreal, down 0.6 per cent and up 0.4 per cent.
- Ottawa, down 0.3 per cent and up 1 per cent.
- Quebec City, down 0.4 per cent and up 1.5 per cent.
- Toronto, up 0.4 per cent and up 4.9 per cent.
- Vancouver, up 0.6 per cent and up 5.5 per cent.
- Victoria, down 1.7 per cent and down 4 per cent.
- Winnipeg, down 0.1 per cent and up 3.4 per cent.
Vancouver, the index showed, as the only centre to hit a new high, while prices in Toronto are close to their peak of last summer.
But all is not as it seems at first blush, The Globe and Mail's Tara Perkins reports.
The index closed out last year with a price rise of 3.8 per cent, compared to 3.1 per cent in 2012.
“But this pick-up comes from only three regions (namely, Calgary, Vancouver and Toronto) where price increases in 2013 exceeded the national average,” said senior economist Marc Pinsonneault of National Bank.
“For the eight other regions covered, the overall price increase was just 1.2 per cent in 2013.”
Indeed, he cited “price weakness” in Victoria, Ottawa, Montreal, Quebec City and Halifax, with no real improvement in store this year.
“Furthermore, affordability has decreased in Canada due to higher mortgage rates,” he said. “ …For these reasons, we believe that over all in Canada, house price increase in 2014 will barely cover CPI inflation (about 1.5 per cent).
Canada's banking watchdog will replace one of its key capital calculations with a global leverage ratio to meet new international standards.
Canada’s Corus Entertainment Inc. hiked its annual dividend by 7 cents as it boasted stronger first-quarter results. Shaw Communications Inc. also boosted its dividend.
Keep an eye on shares of Google Inc. today after its $3.2-billion (U.S.) deal late yesterday for Nest Labs. Inc.
Also watch shares of Time Warner Cable Inc., whose stock is also up after it rejected a massive bid by Charter Communications Inc. yesterday.
- Bank watchdog moves to comply with global standard, swaps key calculation
- Corus hikes dividend as profit tops forecasts
- Shaw posts profit, but loses more TV customers
- Omar El Akkad: Google bets on the automated home, buys Nest for $3.2-billion
- Charter offers to buy Time Warner Cable for $37-billion in appeal to shareholders
Streetwise (for subscribers)
ROB Insight (for subscribers)
- Internet neutrality rules struck down by U.S. appeals court
- Conrad Black asks Canadian regulator to throw out case against him
- Lululemon gets to work on remaking its tarnished image
- Euro zone November output beats expectations
- Valeant eyeing Pfizer's generics unit: report
- Shaw posts profit, but loses more TV customers
- GM sold 9.7 million vehicles in 2013, up 4%