These are stories Report on Business is following Friday, Sept. 6., 2013.
Who cares about Keystone?
Canadian oil companies may be pushing for the Keystone XL pipeline to the U.S. Gulf Coast, but American refiners don’t appear overly troubled, The Wall Street Journal reports.
The U.S. refiners are coming around to the idea that the controversial TransCanada Corp. project will never be built, the news organization says, but “they don’t particularly care” as other methods of transporting Alberta oil, such as rail, pick up steam.
The massive pipeline has been held up by environmental concerns that forced the Canadian company to reroute it, and seek approval a second time.
TransCanada remains hopeful the U.S. government will approve of its new plan, but there has been no signal to date.
So, the Journal reports, refiners are taking other steps.
Valero Energy Corp., for example, which had initially pegged its hopes on Keystone XL, is now taking other steps, such as overhauling rail terminals.
“If we just sat around and waited for Washington, we’d never get anything done,” a spokesman for Valero told the news organization.
Citing statistics from the American Association of Railroads, the Journal noted that almost 200,000 rail cars in Canada transported oil or fuel in the first seven months of this year, which marks a 20-per-cent jump from a year earlier.
At the same time, refiners are using more oil from Texas and North Dakota, the Journal said.
Canadian, U.S. jobless rates dip
Canada’s unemployment rate dipped in August to 7.1 per cent as part-time work fuelled a massive gain in jobs.
The economy churned out 59,000 new positions, Statistics Canada said today, almost 42,000 of them part-time. The ranks of the self-employed also rose.
Still, more than 17,000 of those new jobs were full-time, The Globe and Mail’s Tavia Grant reports.
Since last year at this time, Canada has created 246,000 positions, marking an increase of 1.4 per cent. But in the past six months, job creation has averaged 12,000, compared to 29,000 in the previous half-year.
Both the private and public sector added jobs, though they were concentrated in just two provinces, Ontario and Alberta.
In the United States, the jobless rate also dipped, to 7.3 per cent in August from 7.4 per cent in July.
The U.S. economy created 169,000 jobs last month, though previous measures for June and July were revised down by some 74,000.
Canada's jobs reports of late have been extremely volatile, and today's will certainly add to questions.
"Moving beyond that elephant in the room, the results are impressive, and sweep aside July’s temporary weakness," said chief economist Douglas Porter of BMO Nesbitt Burns.
"Looking through the wild monthly gyrations, Canada is still churning out decent job gains (12,700 per month so far this year), just enough to gradually cut into the unemployment rate," he added in a research note.
"This will not make much impact on the Bank of Canada’s outlook, as the labour market has barely tightened in the past year and wages remain incredibly mild. However, no question it’s a nice boost for the Canadian dollar, especially when stacked against the disappointing U.S. jobs tally."
- Tavia Grant: Canadian jobs surge on part-time work, jobless rate eases to 7.1%
- U.S. job growth misses expectations, may delay Fed tapering
The big question on everyone’s mind, of course, is this: What do the latest U.S. jobs numbers means for the Federal Reserve and its huge stimulus program?
The U.S. central bank has indicated it could soon begin to pull back from its monthly bond-buying program known as quantitative easing, or QE, which could come as early as this month.
But the Fed’s policy-making body, the Federal Open Market Committee, is concerned over the elevated level of unemployment, and this will play a big role in its decision.
The best guess, according to some economists today, is that today’s jobs report won’t change the timeline.
“Our best guess is that the cumulative evidence of improvement over the past year will convince a majority of officials that tapering should begin at the next FOMC meeting in another couple of weeks’ time, but we’re not going to pretend this is a certainty,” said Paul Ashworth of Capital Economics in Toronto.
“Over all, with other indicators like initial jobless claims pointing to a strengthening labour market and the activity surveys indicating a pick-up in economic growth, we still expect the Fed to go ahead with the taper later this month.
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