These are stories Report on Business is following Friday, Oct. 5, 2012.
Flaherty misses target
The Canadian government’s deficit sure looks better than a year ago, but it’s shy of the mark set by Finance Minister Jim Flaherty.
Today’s report from Mr. Flaherty puts the 2011-2012 shortfall at $26.2-billion. That’s down markedly from $33.4-billion a year earlier and $55.6-billion the year before that.
But Mr. Flaherty’s March budget called for a 2011-2012 deficit of $24.9-billion, so the government is short of its target. The miss is actually $1.4-billion, though the numbers don't match up because of rounding.
“This positive performance is encouraging and reflects Canada’s sound economic and fiscal fundamentals,” Mr. Flaherty said in a statement.
“However, the global economic environment is still fragile and uncertain, and recent economic developments suggest that there are downside risks to the fiscal outlook contained in Economic Action Plan 2012. Nonetheless, our government remains committed to achieving our goal of returning to balanced budgets over the medium term.”
Over the fiscal year, revenues increased by 3.4 per cent, largely on a stronger economy and outpacing the increase in program expenses of 0.3 per cent the government said.
Ottawa’s debt now stands at just over $582-billion. The key measure of debt to gross domestic product inched down to 33.8 per cent from 33.9 per cent.
Canada’s fiscal standing has been lauded around the world, which is why the country commands a triple-A rating and is such a draw for foreign investors.
Just for trivia’s sake: Income tax represents almost 50 per cent of total revenues, followed by corporate income tax at almost 13 per cent and the goods and services tax at just under 12 per cent.
Revenue from personal income tax climbed 5.1 per cent in the last fiscal year, highlighting what the government said were gains in personal income.
And while corporate tax rates have fallen, revenues climbed 5.8 per cent as corporate profits increased.
Canada pumps out jobs
The North American labour market appears to be perking up nicely.
In Canada, the economy churned out a stunning 52,000 jobs in September, though the unemployment rate inched up to 7.4 per cent as more people looked for work.
That’s the second month in a row of gains and, importantly, most were in full-time work, The Globe and Mail's Tavia Grant reports. Many of them, however, were in the category of self-employment.
“Looking past the gyrations in the monthly jobs tally, the underlying trend in Canadian employment is surprisingly stable at around a 1-per-cent year-over-year pace, which has not been quite enough to keep the jobless rate from rising,” said deputy chief economist Douglas Porter of BMO Nesbitt Burns.
Canada’s young people, however, are still suffering, having made no gains and struggling with a jobless rate of 15 per cent.
“Youths are the only demographic group that have not recovered from the employment losses observed during the recession,” Statistics Canada said, noting a loss of 70,000 among young people in the past year.
In the United States, employers added 114,000 jobs, according to the Labor Department, though the surprising news came in revisions to earlier readings, The Globe and Mail's Kevin Carmichael writes from Washington.
Notably, America’s jobless rate eased to 7.8 per cent from 8.1 per cent, the lowest in almost four years and good news for President Barack Obama as he seeks re-election.
The numbers for August and July were also revised up, fuelling hopes of a pickup in the jobs market.
Zynga decline continues
Shares of Zynga Inc plunged today, continuing their painful decline, after the online gaming company slashed its outlook and warned it expects a writedown of up to $95-million (U.S.).
Late yesterday, Zynga cut projections for bookings this year to about $1.1-billion, down from an earlier forecast of between $1.15-billion and $1.2-billion. Bookings are an important measure in that they point to future revenues.
It also projected a loss of up to $105-million for the third quarter, and a writedown on its acquisition of OMGPop Inc. It's the second time in as many months that the company has cut its forecasts, and several analysts are slashing their price targets.
Zynga makes games such as The Ville that are played on Facebook. Investing in the company, however, is no game, given the plunge of more than 70 per cent since its IPO late last year.
“The change in outlook is primarily due to reduced expectations for certain web games including The Ville, and delays in launching several new games,” Zynga said in a statement.
Greece a trouble spot
Pick the best label for Greece: Deadbeat, freeloader, unwelcome guest. Or, as one market watcher put it today, a “headache.”
Greece’s Prime Minister Antonis Samaras said in a newspaper interview published today that his government will run out of cash by the end of next month if it doesn’t secure its next bailout payment of €31-billion.
The so-called troika, lenders that include the European Union, the International Monetary Fund and the European Central Bank, are now reviewing the books in Athens, key to the next payment.
Mr. Samaras told Germany’s Handelsblatt that “the till will be empty” at the end of November.
This comes as markets still speculate on when Spain will seek a full-scale sovereign bailout.
“Of course Greece is also a headache, saying that it only has enough cash to last it until the end of November,” said analyst Chris Beauchamp of IG in London.
“We have heard these announcements before, and the likely result is that they will get another tranche of bailout money, albeit with fresh demands for new austerity measures attached."
Fun with Bond. James Bond
Yes, today is James Bond Day, marking the 50th anniversary of Dr. No and the launch of an enduring film franchise.
So, here goes: Sean Connery and Daniel Craig were the best. Enjoyed Pierce Brosnan. Hated Roger Moore. Timothy Dalton was so-so. I never saw the George Lazenby one. (And remember David Niven?) Favourite movie is still Goldfinger. And, just for fun:
Goldfinger: Peter Munk
Dr. No: Angela Merkel
Die Another Day: The euro zone
Never Say Never Again: Greece
Diamonds Are Forever: Harry Winston
Shaken, not stirred: The markets
- S. Africa strikes deepen, Shell declares force majeure
- Bank of Japan stands pat, cuts economic view as recession risk looms