Posthaste: Jobs blockbuster ‘cements’ October hold for Bank of Canada — and cost of caring for our aging nation to triple in 30 years
Here’s what’s you need to know this morning:
Wow! Yet another jobs surprise from Canada. The economy gained 53,700 net jobs in September with all the gains coming in full-time work. The unemployment rate fell to 5.5% from 5.7%. Analysts had expected between 7,500 and 10,000 jobs. “Canada’s labour market seems to have been vaccinated against the global economic flu going around,” said CIBC chief economist Avery Shenfeld in a note. “A jobless rate of only 5.5% will cement the case for the Bank of Canada to remain on hold in October, but we continue to look ahead towards the global slowdown impacting Canadian data over the balance of the year.”
Meanwhile, markets are happy on hopes that the U.S. and China will reach some kind of trade truce as talks in Washington enter their second day. U.S. futures jumped after President Donald Trump, who meets with China’s lead negotiator Vice Premier Liu He today, said talks were going ‘really well’. Just in case, here is what’s at stake if they don’t:
Oct. 15: U.S. duty of 25% already in place on at least US$250 billion worth of Chinese imports will rise to 30%.
Dec. 15: Additional 15% tariff on about US$300 billion of imports from China already hit by 15% duty on Sept. 1. These are mostly consumer goods, including flat panel television sets, flash memory devices, power tools, cotton sweaters, bed linens, multifunction printers and some footwear.
Dec. 15: 15% tariff on Chinese goods not previously covered by U.S. duties. These will hit consumer tech hard, including cellphones, laptop and tablet computers.
The bottom line: If fully adopted, U.S. tariffs will cover virtually all imports from China, worth about US$550 billion by Dec. 15. — Reuters
Some darker news on an aging Canada. Within the next 30 years the number of Canadians over 85 is expected to more than triple and unless society makes plans for their long-term care ‘an immediate and high national priority’ a generation of Canadian seniors is at risk of going with unmet needs as they age, concludes a new study. The National Institute on Ageing at Ryerson University projects that by 2050 the costs to the public of care for the aged will more than triple, from $22 billion to $71 billion annually. That will amount to 19% of personal income tax by 2050, up from 9% now. At the same time, unpaid care will become a reality for many more Canadians. Family members will need to increase their efforts by 40% to keep up with the needs. Without that unpaid care, costs to the public purse would grow to an eye-popping $98 billion by 2050, a quarter of projected personal income tax revenue.
Today’s data: Canadian jobs, University of Michigan consumer sentiment index
A surge in Vancouver and Toronto housing sales in September could be signalling that the real estate market is approaching equilibrium, according to this week’s Haider-Moranis Bulletin. As the graph below shows September 2019 sales in Toronto, at 7,825 units, are similar to the sales recorded in September 2014 and 2015. Other evidence is the converging prices of semi-detached units, condos, and townhouses in cities such as Toronto. Housing markets have arrived back at a point “where we should have been,” said CIBC deputy chief economist Benjamin Tal.