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Why leaders should act now By the time the world's leaders get around to actually dealing with ugly levels of unemployment, a generation could be lost.
I'm particularly troubled by the final statement from the G20 leaders meeting in Cannes, who say they recognize the problem and understand they have to band together to fight it, particularly on the youth unemployment front. They call it "unacceptable."
Their response? "We firmly believe that employment and social inclusion must be at the heart of our actions and policies to restore growth and confidence. We therefore decide to set up a G20 task force which will work as a priority on youth employment."
An earlier draft said this task force would "provide input" to a labour ministers' meeting next year, though that was not in the final version. Yes, a task force that will provide more information to another meeting next year.
Where Canada's concerned, just for example, today's report on the labour market from Statistics Canada shows youth unemployment has inched up to 14.1 per cent, and 408,000 young people can't find work. And it's far bleaker in other countries, particularly in some of the problem areas like Spain and Ireland.
As the International Labour Organization reported last month, there are more than 75 million young people without work around the globe.
"In the current context of economic instability, young men and women face increasing uncertainty in their hopes of finding a decent job," the ILO said. "... Political pressure to prevent the disheartening of a 'lost generation' is likely to increase over the short term and governments may be forced to shift priorities."
Canada loses jobs Canada's jobs market is showing more signs of strain.
After a big bounce in September that was believed to reflect seasonal back-to-school work, Canadian employers shed 54,000 jobs in October, The Globe and Mail's Tavia Grant reports.
The jobless rate climbed back to 7.3 per cent from September's 7.1 per cent, Statistics Canada said today.
October's loss almost unwinds September's gain of 61,000 jobs. Note, too, that job creation in July and August were flat.
"Suddenly the jobs market doesn’t look quite so rosy in Canada," said chief economist Avery Shenfeld of CIBC World Markets.
Jobs were lost in both the private and public sector. More than 48,000 jobs were lost in manufacturing, and some 20,000 in construction. Given the hit to manufacturing, Ontario accounted for many of the losses. Note, too, that almost 72,000 full-time jobs were lost.
"Suffice it to say that while job losses in any given month are by no means rare, losses of this magnitude are extremely rare, aside from recessionary periods - the last such hefty job drop outside of recession was in September 1996," said deputy chief economist Douglas Porter of BMO Nesbitt Burns.
"Canada’s employment picture had been a surprising success story in 2011, at least up until this nasty result for October," Mr. Porter said. "The pressing question now is whether this steep pullback represents a correction from that surprising strength, or the start of a new dismal trend? Given that the U.S. economy appears to be still plugging ahead, albeit gradually, we suspect the former. However, no question, this is an extremely loud warning shot for the economy."
Also worth noting was that pay gains are slowing, to just 1.3 per cent in October from a year earlier, while the total number of hours worked slipped for the second month in a row. For Scotia Capital economists Derek Holt and Karen Cordes Woods, this is more important than the month-to-month volatility in the overall employment numbers.
"Swings of tens of thousands in the monthly job count matter far less than the fact that the millions of employed Canadians are just not making wage gains that are keeping up with the cost of filling their grocery carts, fueling their cars and what they're spending on other staples," they said today.
"This is imposing real wage reductions upon the Canadian consumer and is cause for a defensive bias toward the outlook for consumer spending particularly given structural peaks on most forms of activity in the household sector."
U.S. economy creates jobs American employers are, at least, adding jobs. But it's still not enough to really ease what Ben Bernanke calls a national crisis.
The U.S. economy churned out 80,000 jobs last month, less than what's needed, and the unemployment rate only inched down, to 9 per cent from 9.1 per cent in September.
Still, it's something. And, in one optimistic sign, the U.S. Labor Department revised its readings from August and September, showing the economy created 102,000 more jobs than initially reported as summer was fading.
Today's numbers show private employers added more than 100,000 jobs, but governments cut back.
"Faster job growth will depend on a speedier economy," said senior economist James Marple of Toronto-Dominion Bank
"While America's firms are lean and mean, with lots of cash on hand, growth is struggling against three rather strong headwinds: the European crisis, fiscal tightening, and a moribund housing situation. Until these are lifted, job creation is unlikely to reach the cruising speed necessary to materially bring down the stubbornly high unemployment rate."
Italy in the limelight The European Union and the International Monetary Fund are going to babysit Italy's Silvio Berlusconi.
Italy, the new focus of the euro debt crisis (though Greece is never far from sight), agreed today to be monitored by EU and IMF officials to ensure it is delivering on its promised reforms.
Mr. Berlusconi, whose economy is the third-largest and most indebted in the 17-member monetary union, is under intense pressure, with calls for his resignation.
Notice how the weak links in the euro zone are fast losing their sovereignty? First, an ultimatum from Germany and France forced Greece's George Papandreou to scrap plans for a referendum on the crisis agreement struck in Brussels.
Now, Mr. Berlusconi, who has promised his colleagues he'll come through with reforms on pensions and the labour market, is on a very short leash as well.
- European debt crisis spreads to Italy
- Live G20 updates from The Globe and Mail's Eric Reguly and Douglas Saunders
World awaits Greece As always, Greece is leaving the markets hanging.
After his abrupt about-face yesterday on the question of a referendum, Mr. Papandreou today faces a confidence vote in parliament.
Mr. Papandreou is under mounting pressure to resign amid reports that he'll do just that, but only after striking a deal with his opponents for a coalition.
"After yesterday's barrage of rumour and counter-rumour from Athens, the fate of Greek PM Papandreou hangs in the balance," said Chris Beachamp, market analyst at IG Index. "While the Greek referendum may have been junked, all bets are off as to what might happen should parliament decide to kick out the current government."
Stocks won't have a chance to react, as the vote is expected after North American markets close.
"The opposition has already rejected talk of collaborating to form a government, which therefore raises the prospect an election as soon as the end of the month should the government lose the confidence vote," said Scotia Capital's Mr. Holt.
"With the exception of one notable slip in the referendum flap, I would think that the current PM should be viewed as more market friendly than the opposition such that a failed confidence vote raises the spectre of stalled fiscal austerity and a disorderly default."
- Greek PM faces knife-edge survival vote
- Greece backs off referendum, dealing blow to euro zone equality
Carney named to top spot The Bank of Canada's Mark Carney, who played the starring role in bringing Canada's economy back to life from the recession, is taking over as the chief of the G20's global banking watchdog.
As chairman of the Financial Stability Board, the central bank governor will be tasked with co-ordinating the efforts of world banking authorities to establish guidelines that would prevent a further meltdown, The Globe and Mail's Eric Reguly reports from Cannes, where the G20 is meeting.
- Carney takes reins of global banking watchdog
- Carney expected to impose tougher rules on top global banks
Telus gains Telus Corp. today came in with strong third-quarter results, boosted by big revenue gainst on the wireless data side of its business.
Telus earned $326-million or $1 a share, The Globe and Mail's Iain Marlow reports, up by about 30 per cent from $251-million or 78 cents a year earlier. The results topped analysts' estimates.
“Telus remains committed to our strategy of focusing on data solutions that we initiated in 2000," chief executive officer Darren Entwistle said in a statement.
- Corzine resigns from collapsed MF Global
- Air Canada profit slips 12%
- House prices to hold next year: CMHC
- DragonWave expands with Nokia Siemens' microwave unit buy
- Groupon IPO to raise $700-million
In Economy Lab
The United States, Canada, Europeans and others have been calling on China to play a more forceful role in rebalancing the global economy. Kevin Carmichael examines the issue.
News that Rovio Entertainment Ltd., creator of the hyper-popular Angry Birds game, is planning to open its own retail outlets in China next year comes as little surprise to the vendors in the country’s markets, Carolynne Wheeler writes from Beijing. The bigger question might be why they waited so long to cash in on their popularity.
Making a good first impression is incredibly important, because you only get one shot at it, Vanessa Van Petten of Forbes.com writes.
From today's Report on Business