Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

These are stories Report on Business is following Friday, Oct. 11, 2013.

Follow Michael Babad and The Globe's Business Briefing on Twitter.

Unemployment rate eases
Do we need to revise what we consider to be full employment?

Story continues below advertisement

Economist Douglas Porter raised that question today as the unemployment rate slipped below 7 per cent, with 11,900 new jobs in September.

Looking deeper into the numbers, you find that the drop in the jobless rate matched the decline in the rate of participation in the labour force, which means whether or not you're counted in the Statistics Canada survey. Which means the jobless rate may be falling at least partly for the wrong reason.

That pace dipped because of a "decline in job-hunting" among young people, noted chief economist Avery Shenfeld of CIBC World Markets.

"That suggests that students or recent grads were less eager to work at the start of the school year than seasonals expect," he added.

The jobless rate among young people now stands at 12.9 per cent, compared to 14.1 per cent in August, as youth jobs rose in September by almost 16,000.

Chief economist Douglas Porter of BMO Nesbitt Burns noted that the participation rate, down to 66.4 per cent, is now the lowest since 2002.

"While much of the improvement reflects cooler labour force growth (it's up just 0.8 per cent year-over-year, while employment is up 1.2 per cent year-over-year), the drooping participation rate may force a rethink on what constitutes Canada's natural rate of unemployment," he said, adding demographic factors, such as an aging work force, may also play a role.

Story continues below advertisement

He was referring to what would be considered full employment, or the lowest the rate can be with little in the way of wage pressure. And remember, the jobless rate was down in the 6-per-cent range before the financial crisis.

"The rule of thumb used to be 6.5 per cent, but it's now likely lower than that - we're already at 6.9 per cent with no sign of wage pressures," Mr. Porter added.

Markets buoyed
Yesterday's optimism is carrying over into today amid hopeful signs of a truce in the U.S. fiscal war.

Markets are up today, though nowhere near the surge of yesterday, but the more buoyant mood is holding after the House Republicans proposed a way out of the crisis, and talks are continuing on this, Day 11 of the U.S. government's partial shutdown.

"The proposal for a temporary increase in the debt ceiling that is being discussed by political protagonists in Washington has given an impressive boost to investor confidence overnight," said Kit Juckes, the chief of foreign exchange at Société Générale.

"The general consensus is that a deal will be done, that it represents de facto capitulation by the Republicans as a result of voters 'blaming' them for the stalemate, and that the temporary deal will become permanent before Thanksgiving [in the United States]."

Story continues below advertisement

As our Washington correspondent Kevin Carmichael reports, the Republicans yesterday proposed a short-term lift to the U.S. government's debt limit, which is up against what the Treasury Department says is an Oct. 17 drop-dead date, after which it will be tapped out. The stalemate has sparked fears in the markets of a failure to meet the deadline and, further, the potential for a debt default.

One of the issues with the Republican proposal is that it wouldn't end the shutdown. And, of course, it would only put the bigger issue over to another date.

For now, however, investors are welcoming the tentative signs of peace.

"On the positive side of things the fact that the two sides are talking to each other is progress and as we know, jaw-jaw is better than war-war," said senior analyst Michael Hewson of CMC Markets in London.

He warned, however, that a political pact to extend the debt ceiling deadline "only serves to shift the debate nearer to the [U.S.] Thanksgiving break, which would obviously mean potentially another six weeks of this political nonsense."

BlackBerry rises
Shares of BlackBerry Ltd. slipped today, having been up earlier, as the co-founders of the company plot their comeback.

Story continues below advertisement

The auction of BlackBerry got a whole lot more interesting yesterday on word that co-founders Mike Lazaridis and Doug Fregin are considering a bid for the troubled smartphone maker.

As The Globe and Mail's Sean Silcoff and Jacquie McNish report, they control 41.7 million shares, or 8 per cent, of BlackBerry, and have hired Goldman Sachs Group Inc. and Centerview Partners LLC to help them plot what to do with it. That includes "a potential acquisition," according to a regulatory filing.

Fairfax, in turn, which holds about 10 per cent proposes to lead a consortium that would acquire BlackBerry for $4.7-billion and has signed a tentative deal with the company.

Other interested parties include U.S. private equity firm Cerberus and industry players such as Google Inc., Cisco Systems Inc. and SAP AG.

Potash slips
Shares of Potash Corp. of Saskatchewan slipped today after the company cut its outlook for third-quarter profits.

Potash said late yesterday it expects earnings per share in the quarter of about 41 cents, down from a range of 45 cents to 60 cents projected earlier.

Story continues below advertisement

The downgrade reflects a potash market in turmoil in the wake of the decision by OAO Uralkali a few months ago to quit a joint trading venture with its Belarusian rival and to plan on boosting output, The Globe and Mail's Bertrand Marotte reports.

Potash's "revised guidance reflects the acute market uncertainty and lingering turmoil battering global potash markets," Raymond James analyst Steve Hansen said in a research note.

U.S. banks report
Some bad and some good as U.S. banks began today to report quarterly earnings.

JPMorgan Chase & Co. sank to a loss in the third quarter of $380-million (U.S.) or 17 cents a share from a profit a year earlier of $5.7-billion or $1.40. Excluding certain items like legal costs - remember those setbacks? - JPMorgan's profit was $5.8-billion or $1.40.

Wells Fargo & Co., on the other hand, posted a nice jump in third-quarter profit to $5.32-billion or 99 cents from $4.7-billion or 88 cents.

Streetwise (for subscribers)

Story continues below advertisement

Economy Lab

ROB Insight (for subscribers)

Business ticker

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies