Aurelia Butler

(Reuters) – The Canadian economy lost more jobs than expected in January, posting its first decline since May 2021 as the Omicron-driven COVID-19 wave peaked, data showed on Friday, but analysts expect a quick rebound in coming months.Canada shed 200,100 jobs, roughly matching the losses in January and April 2021, and the jobless rate jumped to 6.5% from a revised 6.0% in December, Statistics Canada said. Analysts surveyed by Reuters had expected a loss of 117,500 jobs and the unemployment rate to rise to 6.2%.”It’s a little bit weaker than we expected perhaps, but it really lines up quite well with what we saw last spring,” said Andrew Kelvin, chief Canada economist at TD Securities.”I think it is something that we look through given that we can connect it quite directly to the lockdowns related to the Omicron variant.”Canada’s largest two provinces, Ontario and Quebec, tightened restrictions as the Omicron variant took hold. Ontario reopened gyms and indoor dining this week, while Quebec reopened restaurants and has allowed some sports activities.Similar patterns in the previous two COVID-19 waves led to nearly identical job losses, followed by a full rebound within one to three months. Canada’s health officials said last week Omicron infections had passed their peak https://www.reuters.com/world/americas/omicron-infections-have-peaked-nationally-canada-official-2022-01-28.Additionally, Statscan said the jump in the unemployment rate last month was entirely due to temporary layoffs and people scheduled to start work soon, suggesting a looming rebound.Still, the losses were harsh, particularly in high-contact services. Accommodation and food services shed 112,900 jobs, with another 48,400 net jobs lost in information, culture and recreation.Despite the disappointing results, analysts said it was unlikely to change the calculus for the Bank of Canada, which is expected to start hiking interest rates in March.”I don’t think this will have a big impact on the Bank of Canada,” said Doug Porter, chief economist at BMO Capital Markets. “I think their view will be that this is entirely related to the temporary restrictions and that it won’t last.”Bank of Canada Governor Tiff Macklem reiterated this week that interest rates would soon rise https://www.reuters.com/business/bank-canada-head-says-unclear-how-quickly-inflation-will-drop-2022-02-02 and that Canadians should expect multiple increases. Money markets are betting on a first increase in March, with six in total this year. [BOCWATCH]The Canadian dollar was trading 0.8% lower at 1.2772 to the greenback, or 78.30 U.S. cents. More

Bank of England governor Andrew Bailey has been accused of “hypocrisy” after his suggestion that workers should not seek big pay rises attracted sharp rebukes from Downing Street, business groups and unions.In a BBC interview the day after the central bank increased interest rates, Bailey said workers should avoid asking for large pay rises — even as households face the biggest squeeze on their income in decades — in order to help keep inflation under control “In the sense of saying, we do need to see a moderation of wage rises, now that’s painful,” he said. “But we need to see that in order to get through this problem more quickly.”Downing Street on Friday distanced the prime minister from the remarks, which put the BoE boss on a collision course with Boris Johnson, who has repeatedly called for a “high wage” economy. “It is not something the prime minister is calling for,” Johnson’s official spokesperson told reporters. “We obviously want a high growth economy and want people’s wages to increase.”Sharon Graham, general secretary of the Unite union, which is organising industrial action at the Financial Conduct Authority, where Bailey previously worked, said: “Workers didn’t cause inflation or the energy crisis so why should they pay for it?”She added: “Workers don’t need lectures from the governor of the Bank of England on exercising pay restraint. Why is it that every time there is a crisis, rich men ask ordinary people to pay for it?”Mick Lynch, general secretary of the Rail, Maritime and Transport union, said the comments “reeked of hypocrisy”.He argued that the government’s April increase in national insurance and the energy price crisis would not affect Bailey in the same way that it would hit workers: “It’s easy for him to say when you are on the wages of the Bank of England boss. Pay restraint does not appear to apply to bosses of any of the big banks.”Bailey was paid £575,538, including pension, last year. Ann Francke, chief executive of the Chartered Management Institute, said the size of his pay packet “makes him seem rather removed from the pressures most employees are facing”.She added there were other ways to address inflation. “Would he tell employers not to increase prices despite their costs going up? If not, why ever should he ask employees to accept a significant decline in their living standards?”Julian Jessop, fellow at the Institute of Economic Affairs, a free market think-tank, queried Bailey’s grip on economics. “People should ask for the biggest pay rise they can get: wages are a relative price, like any other, and should be left to the markets,” he wrote on Twitter. Kitty Ussher, chief economist at the Institute of Directors, said this was “an issue for organisations to decide themselves — the best way for the government to reduce the wage bill right now would be through scrapping the forthcoming jobs tax, which we know is of itself inflationary.”Bosses say they are under pressure to increase pay to retain and attract staff because of labour shortages caused by the combination of Brexit, Covid-19 absences and a lack of suitable candidates for skilled roles.

Wage increases are occurring across the UK economy, from hospitality roles in bars and restaurants to the best paid City roles among law firms and accountants. Kate Nicholls, head of UKHospitality, said there needed to be “a labour market strategy to ease that pressure cooker and allow parts of the economy to fulfil demand and recover more rapidly by providing them with access to the labour they need”.BoE forecasts showing that real post-tax incomes will drop sharply in 2022, and by more than any year since at least 1990, will not please Downing Street.However, Johnson’s plea last October for a high-wage, high-skill, high-productivity economy is more an ambition. Productivity growth in the UK has had its worst decade since the 1920s, with successive governments since 2008 struggling to find a solution. More

US president Joe Biden has renewed for four years Trump-era tariffs on imported solar panels that were set to expire this weekend as his administration tries to boost US manufacturing of clean energy infrastructure. But his administration said on Friday it would also continue to exempt the double-sided panels common in large projects from levies, and doubled the amount of solar cells, which make up solar panels, that can be imported before tariffs are applied from 2.5 gigawatts to 5GW of generating capacity, giving some relief to utilities and power producers worried about panel costs.Opponents of the tariffs have argued that slapping duties on imported solar panels undermines Biden’s goal of making the US power grid carbon-free by 2035. Backers have said that curbing imports from Asia is crucial if the US is ever to significantly ramp up its domestic production of solar equipment. Senior administration officials said the tariffs would help US manufacturers and build a North American solar supply chain. The officials said the US Trade Representative’s office would look to strike agreements with Mexico and Canada that would exclude them from the tariff regime. Former president Donald Trump imposed emergency “safeguard” tariffs of 30 per cent on solar product imports in 2018, declining to 15 per cent over four years, in an attempt to protect American jobs. Late last year, the US International Trade Commission, the US’s independent advisory trade body, recommended a four-year extension of the tariffs with annual declines of 0.25 per cent per year to “prevent or remedy serious injury to the US industry”. The US imported 19.3 peak gigawatts of solar panels in 2020, up from 15.3GW in 2019, according to the US Energy Information Administration. The leading exporter to the US was Vietnam, followed by Malaysia, South Korea and Thailand. According to the EIA, the price of solar panels declined in the decade from 2010, with the average value of shipments falling from $1.96 per watt in 2010 to $0.38 per watt in 2020. The EIA says lower supply chain costs and an oversupply of modules are “largely responsible” for the declining value. However, some analysts have scaled back their forecasts for future US solar installations as cost inflation and supply congestion ripple through the industry this year.

Video: Space-based solar power ‘could be deployed in 10 years’

In 2019, US-produced solar modules achieved a record market share of 19.8 per cent, the highest figure in a decade, according to the Coalition for a Prosperous America, a lobby group that advocates for US-based manufacturing. The CPA called the White House decision “a gift to Beijing”. Zach Mottl, its chair, said the tariff extension was “in name only” because it excluded so-called bifacial panels. The move would “ensure a tsunami of cheap Chinese solar products, made with forced labour and produced by dirty coal-fired power plants, flood into the US,” Mottl said. The decision received mixed reactions from groups representing the US solar power industry. Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, said the administration had reached a “balanced” solution. Some trade restrictions remain in force on imports of solar products from China. Last summer, the Biden administration took punitive actions against Chinese solar product manufacturers in a crackdown over the internment of Uyghurs and Muslim minorities in Xinjiang province. More

(Reuters) -Tech stocks staged a tentative rebound across financial markets on Friday as stellar results from Amazon.com Inc (O:AMZN) convinced traders not to give up on a sector weakened by a global monetary tightening cycle and the historic crash of Facebook (NASDAQ:FB) owner Meta.The company, led by Chief Executive Mark Zuckerberg, saw over $200 billion of its market value wiped out after it issued a dismal forecast, representing the biggest single-day slide for a U.S. company.Meta Platforms Inc’s sell-off spilled over to other listed tech companies, dragging Wall Street deep into the red, before Amazon’s convincing earnings beat after the market close on Thursday changed the mood.Inspired by the results for the tech giant, Asian equities rose about 1% and Amazon’s shares listed in Frankfurt were up 12%.Shares of social media platform Snap Inc (NYSE:SNAP) were up more than 50% in pre-market trading, after tumbling by a quarter in the previous session, in another sign that sentiment towards the sector was steadying. The overnight volatility attracted retail buyers. Thursday’s net purchases of Meta’s shares by retail investors hit $231 million, a 3-1/2 year high according to Vanda (NASDAQ:VNDA) Research, marking it the third biggest day of net purchases since January 2014. At 1256 GMT, the European tech index was down a modest 0.4% in contrast to the Nasdaq 100’s 3.7% fall on Thursday, and was outperforming the rest of pan-European STOXX 600 index. Nasdaq was set to open higher with futures up 1%.MIXED BAGThe fourth-quarter earnings season has been mixed for tech companies with bitter disappointments from such players as streaming giant Netflix (NASDAQ:NFLX) and fintech PayPal (NASDAQ:PYPL) partially offset by uplifting results from Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). Mark Haefele, chief investment officer at UBS Global Wealth Management, said the big picture for the sector was far from bleak. “Overall, the earnings outlook is still solid, with the global tech sector on track for earnings growth of around 15%,” he wrote in a morning note to clients.”In our base case, we expect valuations to stabilize and for strong mid-teens earnings growth to be reflected in share prices over the next 12 months.”Many investors started trimming holdings of tech stocks even before the earnings season kicked off as future earnings growth promised by the sector loses its appeal when central banks raise rates, increasing the immediate financial rewards of holding risk-free government bonds.Top investment banks have been recommending rotating portfolios towards stocks that do well when inflation and bond yields rise, such as banks, insurers, miners and oil companies, ever since the U.S. Federal Reserve flagged it would start raising rates from next month. More