These are stories Report on Business is following Thursday, Aug. 14, 2014.
The Canadian dollar is on the rise again this morning, nearing the 92-cent level, but, really, all bets are off until tomorrow.
The loonie, as Canada’s dollar coin is known, reached a high of 91.85 cents U.S. in the early hours before dipping.
But the gain, said chief currency strategist Camilla Sutton of Bank of Nova Scotia, was due to weakness in the U.S. currency rather than anything driving the Canadian dollar specifically.
Tomorrow morning, however, Statistics Canada will release a corrected version of its July jobs report, which should move the currency one way or the other.
It lost about half a cent last Friday on the Canadian agency’s surprisingly weak, and now known to be flawed, report showing job creation of just about 200 positions, with full-time work plunging and part-time surging.
Statistics Canada disclosed on Tuesday that there was an error in the report, though it wouldn’t say what, adding that the mistake was an isolated one.
That brought the loonie back to just about where it had been on Friday morning, before the incorrect report was released.
A strong jobs report tomorrow would further boost the currency, and a weak one would again drive it down, Ms. Sutton said.
Some economists expect the report will show better gains, possibly as high as about 30,000, while others warn against betting that will be the case because so little is known at this point.
- How money may be lost or won on Statistics Canada jobs flub
- Bill Curry: EI claims on hold while Statscan fixes jobs report error
- David Parkinson in ROB Insight (for subscribers): Markets shouldn't have to wait for reliable jobs data
- Bill Curry: Statistics Canada rushing to redo July job numbers
- 12 jokes: Next jobs report? Your guess is as good as ... a statistician's
- Kevin Carmichael: Surprisingly negative jobs report supports low-rate stance
Europe is faltering. Again.
Unemployment is high, inflation is dangerously low, and the economies that make up the troubled euro zone are flat-lining.
According to the Eurostat agency today, gross domestic product registered absolutely no gains in the second quarter of the year, as France lagged and powerhouse Germany actually contracted.
Across the broader 28-nation European Union, the economy showed growth of 0.2 per cent in the quarter.
The region’s major economies took it on the chin, notably Germany, whose economy shrank by 0.2 per cent.
“This was the first contraction in over a year and although there is a good explanation behind it (production was piled on in Q1 due to warmer weather), the decline was still more than expected and casts a shadow over the ‘strongman’ of the region,” senior economist Jennifer Lee of BMO Nesbitt Burns said of the German showing.
“And, it certainly doesn’t help that businesses are increasingly nervous over the rocky relations with Russia, and the sanctions imposed. Things weren’t that much better in France. Although the economy didn’t shrink, it didn’t grow either.”
France’s finance minister, Michel Sapin, reportedly said the country would not now meet its deficit target, warning that “growth has broken down, in Europe and in France.”
The annual inflation rate across the euro zone meanwhile, dipped in July to 0.4 per cent, the lowest since the fall of 2009, raising further fears of deflation, while unemployment stands at 11.5 per cent.
Wal-Mart trims forecasts
The world’s biggest retailer has cut its outlook for the year, citing “headwinds” from U.S. health care costs and investments in its online operation.
Wal-Mart Stores Inc. said today it now expects earnings per share, from continuing operations, to come in between $4.90 (U.S.) and $5.15 this year, down from its earlier projection of $5.10 to $5.45.
That, the retailer said, assumes third-quarter earnings per share will be between $1.10 and $1.20.
“Our guidance includes incremental investments in e-commerce and headwinds from higher health-care costs in the U.S. than previously estimated,” said chief financial officer Charles Holley.
The bleaker outlook came as Wal-Mart posted a second-quarter profit of $4.09-billion, or $1.26 a share, diluted, compared to $4.07-billion or $1.24 a year earlier.
Revenue climbed to $120.1-billion from $116.8-billion.
“We see opportunities to improve in merchandising, pricing and store level service in our supercenters, and we are working to close those gaps,” chief executive officer Doug McMillon said in a statement.
“Our investments in e-commerce and mobile are very important, as the lines between digital and physical retail continue to blur.”
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