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Carney warns recovery at risk Bank of Canada Governor Mark Carney warns the global recovery is at risk if the reforms pledged by the G20 aren't carried through. He's also troubled by the threat to Canada of the U.S. slowdown and the deflationary pressures popping up in major economies, according to the text of a speech he was giving today in Calgary.
"The current outlook is for continuation of a modest global recovery, balancing stronger activity in emerging market economies with weaker growth in some advanced economies," Mr. Carney said in the published remarks. "However, there are non-negligible risks on the downside. In particular, the current functioning of the international monetary and financial systems is beginning to force a wrenching real adjustment across major economies. Renewed weakness in the United States could have important implications for the Canadian outlook. In this environment, the bank will have to chart a careful course for Canadian monetary policy."
Three years in from the start of the financial crisis, Mr. Carney said that bank, household and sovereign deleveraging can be expected to "add to the variability and temper the pace" of the global rebound going foward. The current global monetary system, he added, promoted the huge buildup of debt in the runup to the crisis, and could complicate the "process of balance-sheet repair" that's needed.
"It is fostering deflationary risks in major advanced economies and asset-price inflation in emerging markets," the central bank chief added. "For countries like Canada, the outlook and policy environment remain unusually challenging."
Economy creates 36,000 jobs as teachers return Canada has now recouped the jobs lost to the recession, though the unemployment rate is actually climbing and has a long way to go before retreating to pre-slump levels. And those gains still don't make it a pretty picture.
Some 36,000 positions were created in August, Statistics Canada said today, while the jobless rate inched up to 8.1 per cent from 8 per cent as more people joined the labour force. Also notable in this morning's report were the 68,000 jobs added in the education sector. This had been expected given the drop of about 65,000 in the last report because of a July phenomenon that skewed the overall numbers. The recorded loss of jobs among teachers and administrative and support staff in July has been an annual event for the past few year as the nature of employment in the sector changed, with more use of temporary and shorter contracts.
"With the August rise, all of the recession's job losses have now been recouped," said BMO Nesbitt Burns deputy chief economist Douglas Porter. "Put another way, there are now more Canadians employed than ever before."
The Statistics Canada report shows 80,000 full-time jobs were added in August, while part-time positions fell by 44,000. Still, since the pickup began in July of 2009, growth in part-time employment has outpaced that of full-time work, at a pace of 4.1 per cent compared to 2.2 per cent.
Besides the education sector, the professional and scientific group also gained, as did the construction sector. Some 26,000 manufacturing jobs disappeared.
Given that the big gain was driven by the teachers, the report wasn't actually all that strong, and adds to evidence that Canada's recovery is losing some steam. "Because of seasonal distortions in both education and manufacturing this year, this is a cloudier report than usual," Mr. Porter said. "However, sifting through the many cross-currents in this release, the underlying story is on the soft side of expectations and consistent with a broader loss of momentum in the Canadian economy. Perhaps the back-up in the jobless rate in the past two months captures the story best, although it is still well down from the 8.7 per cent peak a year ago."
Mr. Porter and others note that while the rebound in numbers has been fast, in terms of reclaiming the more than 400,000 jobs lost in 2008 and 2009, that doesn't mean all is well.
"At about 1.5 million, the number of unemployed remains about one-third above its pre-recession peak, while the rate of unemployment has not only been edging up recently, but it remains about 2 percentage points above its level of two years ago," said TD deputy chief economist Derek Burleton. "A closer look at the reasons for part-time employment shows that a relatively high proportion of individuals are in those jobs involuntarily. Lastly, the soft increase in wages speaks to the ongoing slack in the labour market not to mention the fact that lower-wage service industries have accounted for a sizeable share of gains during the recovery."
BCE taking control of CTV BCE Inc. has agreed to acquire full ownership of CTV Inc. in a $1.3-billion deal that dramatically reshapes the landscape of Canadian media and telecommunications, and changes the ownership structure of The Globe and Mail.
The merger of Canada's largest telecom carrier and the country's No. 1 broadcaster is the latest in a series of deals heralding a new era of convergence between media companies and the cable and phone giants that distribute their content. With the deal, which has yet to be cleared by federal regulators, Bell Canada Enterprises acquires all of CTV's television assets, including the CTV network and specialty cable channels such as TSN, Bravo and the Business News Network.
The transaction also breaks apart CTVglobemedia Inc., created a decade ago when CTV merged with The Globe and Mail. Woodbridge Co. Ltd., the holding company of the Toronto-based Thomson family, will regain majority ownership of the Globe with an 85-per-cent stake. BCE will retain its current 15-per-cent share of Canada's largest circulation national newspaper and its related websites.
Oil rises on Enbridge shutdown The shutdown by Enbridge Inc. of a pipeline in the U.S. is helping to boost crude prices today. There are other factors playing into the market as well, but the shutdown of Enbridge's Line 6A, a major oil transportation link, is playing a role, analysts said. Enbridge halted all oil moving through the pipe after a leak was discovered in an industrial park in Romeoville, Ill.
Though neither the company nor authorities could provide an estimate of how much oil leaked, the accident comes as Enbridge continues work to clean up a different spill in Michigan, where a major summer rupture of a different pipe called Line 6B contaminated a major river system. The Illinois leak, by comparison, appears to have been relatively small, and was halted before oil could reach the nearby DuPage River, according to a spokeswoman for the Illinois Environmental Protection Agency.
Imports to China surge China continues to run a huge trade surplus, and it's likely that trade tensions with the U.S. won't ease anytime soon, but there are signs of stronger demand as imports climb. China's exports in August rose almost 35 per cent, but imports surged 35 per cent, well more than expected and leaving a trade surplus of $20-billion (U.S.). While imports group, the unadjusted level of exports was still the second-highest on record, noted Mark Williams, senior China economist at Capital Economics in London. "More worrying for anyone fearful of the potential for a protectionist backlash, the surplus with the U.S. was the second-highest ever seen," he said.
The U.S. and other countries have pressing China to allow its currency, which hit a fresh high against the U.S. dollar today, to rise, arguing a depressed level is unfair.
Overall, Mr. Williams noted, the import numbers suggest "domestic demand is firming up after a shaky few months ... the economy seems to have found its footing."
Nokia names new CEO Nokia put a new man in charge of the world's biggest mobile phone manufacturer, naming Canadian-born Stephen Elop as its CEO. Nokia, whose stock has slumped on profit warnings, said Mr. Elop, the chief of Microsoft Corp.'s business unit, who was schooled at McMaster University and has held several key posts in the industry, will take over in a couple of weeks. He replaces Olli-Pekka Kallasvuo.
Lululemon beats estimates Lululemon Athletica Inc. came in with stronger-than-expected results today, beating the second-quarter profit estimates of analysts. Revenue jumped almost 56 per cent to $152.2-million, while profit climbed to $21.8-million or 31 cents a share from $9.2-million or 13 cents a year earlier. The yoga wear retailer also boosted its annual forecast.
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