Economic analysis

Econowatch: The good and the bad

Building permits get a boost, while American workers fear for job safety

Kevin Lamarque/Reuters

The Good News

  • America has seen a jump in building permits in recent months. The number of new permits climbed 6.2 per cent in October after a five per cent gain in September.
  • The IMF has called on Canada to get out of the mortgage insurance business by phasing out the CMHC, saying it’s distorting the lending market. Finally, someone’s talking sense.
  • Canadian farmers earned close to 32 per cent more last year than the year before, on higher prices for grains and oilseeds. Talk about cash crops.
  • Researchers found that companies with female directors are more frugal in acquisitions. Of the companies studied, purchase prices were 15.4 per cent lower for each female director on the board.
  • Spain, the economic basketcase of Europe, experienced its first quarter of growth in two full years, with GDP rising 0.1 per cent. Hardly a bull run, but any sign of growth there is welcome.
  • The world’s second-largest clothing chain, Hennes & Mauritz, otherwise known as H&M, said it will pay a “living wage” to 850,000 of its textile workers in developing countries by 2018.
  • Warren Buffett, the oracle of Omaha, is bullish on the disaster that is Detroit, saying demand for the city’s debt will pick up. It will be “a great city in the future.” Rock on.

The Bad News

  • More than six in 10 American workers fear their jobs are at risk, according to a Washington Post-Miller Center poll, a record high not seen in 40 years. It’s an ugly repeat of that ’70s show.
  • Another week, another massive round of layoffs, this time at Sears Canada, which is axing 800 jobs. The struggling retailer can’t catch a break.
  • The revolving door for CEOs is picking up speed. U.S. companies are switching CEOs at the fastest pace in half a decade, according to recruitment firm Spencer Stuart. More turnover means less stability.
  • The shine is off commodities, a crucial driver of Canada’s economy. The Scotiabank Commodity Price Index dropped 3.8 per cent in October, the third consecutive monthly decline.
  • In case you need reminding, RBC says it’s getting harder to afford a home in Canada. Affordability eroded for the second quarter in a row thanks to rising prices and higher mortgage rates.
  • Banks in Europe are getting stingier when it comes to lending to businesses. Private sector lending fell 2.1 per cent in October from the year before, after a similar drop in September.
  • The number of Canadian seniors living in poverty is climbing, according to the OECD. In a global report on pensions it found the poverty rate among the elderly rose two per cent between 2007 and 2010.

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