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Three Solitudes: Jobless rate shifts from tame to towering heading east

These are stories Report on Business is following  Thursday, April 4, 2013.

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Three Solitudes
You can break Canada down into three distinct regions - the West, Central Canada and the East - when it comes to unemployment over the next couple of years.

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Indeed, a fever line would show it climbing almost steadily from Alberta east, according to a new forecast from Toronto-Dominion Bank.

TD economist Jonathan Bendiner projects a jobless rate of 6.6 per cent and 6.5 per cent in British Columbia this year and next.

Here's how the rest of the country breaks down in the TD study released Thursday:

  • Alberta, 4.6 per cent 4.5 per cent.
  • Saskatchewan, 4.6 per cent and 4.6 per cent.
  • Manitoba, 5.3 per cent and 5.1 per cent.
  • Ontario, 7.6 per cent and 7.4 per cent.
  • Quebec, 7.8 per cent and 7.7 per cent.
  • New Brunswick, 10.3 per cent and 10.2 per cent.
  • Nova Scotia, 9 per cent and 8.7 per cent.
  • Prince Edward Island, 11.4 per cent and 11.3 per cent.
  • Newfoundland and Labrador, 12.3 per cent and 12.2 per cent.

For Canada as a whole, TD forecasts unemployment at 7.1 per cent this year and 7 per cent in 2014.

Projections for economic growth also illustrate the weaker trends this year, but for Alberta, Saskatchewan and Newfoundland and Labrador, though, with the latter being the exception, all are forecast to pick up in 2014.

BoJ unveils measures
The new team at the Bank of Japan today went well beyond what markets had expected, with aggressive measures aimed at bringing the country out of its economic funk.

At its first meeting under Governor Haruhiko Kuroda, the central bank announced plans to double its purchases of government bonds and other securities to some ¥7-trillion a month, equivalent to about $75-billion.

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"There was some concern that Kuroda would disappoint markets after talking up "bold" measures, but that wasn't the case with today's announcement more aggressive than anticipated," said senior economist Benjamin Reitzes of BMO Nesbitt Burns.

There are other measures, as well, as the Bank of Japan tries to end deflation and reach its new inflation target of 2 per cent.

"Japan's economy has stopped weakening and has shown some signs of picking up," the central bank said in its announcement.

"With regard to the outlook, it is expected to return to a moderate recovery path against the background of firm domestic demand and a pick-up in growth rates of overseas economies," it added in its statement.

"On the price front, the year-on-year rate of change in the CPI (all items less fresh food) has recently been slightly negative, but some indicators suggest a rise in inflation expectations."

White the Bank of Japan ramped up today, the European Central Bank and the Bank of England held the line.

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40 years on ...
Yesterday marked the 40th anniversary of the first cellphone call. Today highlights just how far we've come.

First, the history.

It was on April 3, 1973, that Martin Cooper of Motorola made the first-ever call from a mobile device, a rather big one at that.

As in, it wouldn't fit in your pocket.

History records that Mr. Cooper called one Joel Engel of Bell Systems from 6 Avenue in New York City, on a DynaTAC phone.

Now, of course, we have the iPhone, the BlackBerry, phones powered by Google Inc.'s Android system, and a host of others.

What's notable today is that Facebook Inc. is going a step further, beyond what's now known as the smartphone, with something designed for even greater social interaction and new ways of doing stuff.

Here's what The New York Times says of today's expected unveiling by Facebook: "It needs to find a way to play a bigger role in delivering what consumers want from their phones: ways to communicate, find answers to questions, shop and be entertained."

According to reports, Mark Zuckerberg's social network will showcase an adapted HTC device that uses Android, and on the home screen highlights Facebook and everything you can do with it, with instant access to your "friends." Oh, yes, and boost advertising.

"Smartphones are now the world's key computing and communicating device," said professor John-Kurt Pliniussen of the Queen's School of Business.

"Facebook wants a big piece of this because more users mean more of their time connected, which translates into billions of advertising and new revenue streams," he added.

"Currently Facebook is the top app for mobile time spent in North America with approximately 25 per cent. Next is Apple iTunes with 9 per cent. In other words, one quarter of all time net on mobile phones goes to Facebook. So if they can control the phone and the app markets … boom."

How it breaks down
Consumers will no doubt be comparing prices between Wal-Mart and Target when the latter opens its first 24 Canadian stores Friday after its soft launch.

As The Globe and Mail's Marina Strauss reports today, shoppers used to the American experience will find some prices higher in Canada. But how will they compared to Wal-Mart?

A Globe-commissioned survey from Field Agent Canada tested Target's plans on a basket of 13 commonly used items, from household goods to beauty supplies, and found 12 of them were 8 per cent lower at Wal-Mart.

The final one was markedly lower at Target.

Lululemon downgraded
Royal Bank of Canada gave Lululemon – sorry, I couldn't resist – the bum's rush today in the wake of its embarrassing see-through pants fiasco and the departure of its chief product officer.

As The Globe and Mail's Marina Strauss reports, Lululemon announced late yesterday that CPO Sheree Waterson will leave the company in mid-April, though it didn't say why, other than the move is part of a broader plan.

In a separate announcement, the Vancouver-based yoga pants maker also said that the material used in the pants in question was at "the low end of Lululemon's tolerance scale."

Already, the company has had to recall many of the pants because of their transparency, in what it expects will cost $67-million (U.S.) in revenue this year.

"We are committed to continually developing best-in-class fabrics, and are committed to only putting product in our stores that meets our stringent standards," said chief executive officer Christine Day.

RBC today downgraded the stock to "sector perform" and "outperform," and cut its price target on the shares to $70 from $80.

"We believe Lululemon represents a unique and compelling growth story in the apparel retail space," said RBC analyst Howard Tubin.

"However, the recent departure of the chief product officer has added a new element of uncertainty to the story," he said, adding that "based on the lead times involved with the product development cycle, we may not see the impact of new design leadership until midway through 2014."

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More


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