Bank of Canada governor says trade war is different for the economy than COVID
The COVID-19 pandemic eventually brought a rapid recovery for the economy, but Bank of Governor Tiff Macklem says don't expect the same to happen if the country winds up in a trade war. He says trade tensions would mean less investment in the country from businesses and there's only so much monetary policy can do to help. (Feb. 21, 2025)
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USA Today
25 minutes ago
- USA Today
US jobless claims surge as tariffs cloud economic outlook
US jobless claims surge as tariffs cloud economic outlook Show Caption Hide Caption FDA will reduce food and drug inspections due to federal layoffs FDA scales back routine inspections due to support staff layoffs, prioritizing high-risk cases amid government restructuring and budget cuts. Straight Arrow News The number of Americans filing new applications for jobless benefits increased more than expected last week and the unemployment rate appeared to have picked up in May, suggesting layoffs were rising as tariffs cloud the economic outlook. The report from the Labor Department on Thursday showed a surge in applications in Michigan last week, the nation's motor vehicle assembly hub. The number of people collecting unemployment checks in mid-May was the largest in 3-1/2 years. The dimming economic outlook was reinforced by other data showing corporate profits declining by the most in more than four years in the first quarter, pulled down by non-financial domestic industries. A U.S. trade court on Wednesday blocked most of President Donald Trump's tariffs from going into effect in a sweeping ruling that the president overstepped his authority. They were temporarily reinstated by a federal appeals court on Thursday, adding another layer of uncertainty over the economy. "This is a sign that cracks are starting to form in the economy and that the outlook is deteriorating," said Christopher Rupkey, chief economist at FWDBONDS. "There is nothing great about today's jobless claims data and the jump in layoffs may be a harbinger of worse things to come." You won't know when a recession starts: 5 key facts about downturns Initial claims for state unemployment benefits rose 14,000 to a seasonally adjusted 240,000 for the week ended May 24, the Labor Department said. Economists polled by Reuters had forecast 230,000 claims for the latest week. They said Trump's aggressive trade policy was making it harder for businesses to plan ahead, a sentiment echoed by a Conference Board survey on Thursday, which showed confidence among chief executive officers plummeting in the second quarter. Unadjusted claims for Michigan jumped 3,329. The automobile industry has been hit with a 25% duty on parts. There were also notable increases in benefits applications in Nebraska and California. Despite the rise in claims, worker hoarding by employers following difficulties finding labor during and after the COVID-19 pandemic continues to underpin the jobs market. That was corroborated by the Conference Board survey, which also showed most captains of business anticipated no change in the size of their workforce over the next year even as about 83% said they expected a recession in the next 12-18 months. Nonetheless, layoffs are creeping up. A report from the Bank of America Institute noted a sharp rise in higher-income households receiving unemployment benefits between February and April compared to the same period last year. Its analysis of Bank of America deposit accounts also showed notable rises among lower-income as well as middle-income households in April from the same period a year ago. Claims could remain elevated in the coming weeks, in part reflecting difficulties adjusting the data for seasonal fluctuations, following a similar pattern in recent years. Minutes of the Federal Reserve's May 6-7 policy meeting published on Wednesday showed while policymakers continued to view labor market conditions as broadly in balance, they "assessed that there was a risk that the labor market would weaken in coming months." The U.S. central bank has kept its benchmark overnight interest rate in the 4.25%-4.50% range since December as officials struggle to estimate the impact of Trump's tariffs, which have raised the prospect of higher inflation and slower economic growth this year. Stocks on Wall Street were trading higher. The dollar slipped against a basket of currencies after a brief rally. U.S. Treasury yields fell. Swelling unemployment rolls The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 26,000 to a seasonally adjusted 1.919 million during the week ending May 17, the highest since November 2021, the claims report showed. The elevated so-called continuing claims reflect companies' hesitance to increase headcount. Continuing claims covered the period during which the government surveyed households for May's unemployment rate. They increased between the April and May survey periods, suggesting an uptick in the unemployment rate this month. "This raises the risk that the unemployment rate could tick up to 4.3% in the May employment report," said Abiel Reinhart, an economist at JP Morgan. The jobless rate was at 4.2% in April. Many people who have lost their jobs are experiencing long spells of unemployment. With profits slowing, there is probably little incentive for businesses to boost hiring. Profits from current production with inventory valuation and capital consumption adjustments dropped $118.1 billion in the first quarter, the biggest decline since the fourth quarter of 2020, the Commerce Department's Bureau of Economic Analysis (BEA) said in a separate report. Profits surged $204.7 billion in the October-December quarter. Profits from domestic non-financial firms dropped $96.7 billion. Companies ranging from airlines and retailers to motor vehicle manufacturers have either withdrawn or refrained from giving financial guidance for 2025, citing tariffs uncertainty. Businesses front-loaded imports, resulting in a record trade deficit that contributed to gross domestic product declining at a 0.2% annualized rate in the January-March quarter, the BEA's second estimate of GDP showed. Some of the imports ended up as inventory in warehouses, with growth in consumer spending downgraded to a 1.2% rate from the initially reported 1.8% pace. The economy was initially estimated to have contracted at a 0.3% pace. It grew at a 2.4% rate in the fourth quarter. A measure of domestic demand was also revised lower. Other alternative measures of growth, gross domestic income and gross domestic output also showed the economy contracting at a 0.2% pace in the first quarter. There were small downward revisions to inflation. "GDP will likely either contract again in the second quarter or hold in low gear, but the economy is unlikely to slip into recession," said Bill Adams, chief economist at Comerica Bank. Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
Yahoo
29 minutes ago
- Yahoo
Blackstone among bidders for $800 million Paris office property, sources say
By Iain Withers LONDON (Reuters) -Blackstone is among several bidders shortlisted to buy a more than century-old office block in Paris with a price tag of 700 million euros ($800 million), a source familiar with the matter told Reuters, in what would be one of Europe's biggest post-pandemic office sales. The CityQuartier Trocadéro building is in a prime location in the 16th arrondissement near the Arc de Triomphe and was put up for sale by the owner, Germany's Union Investment, in March. Real estate investor Hines also made the cut, while Commerz Real, owned by Germany's Commerzbank, also put forward a bid that was unsuccessful, separate sources said. All sources declined to be named citing the sensitivity of the process. Global office prices were crushed after the COVID-19 pandemic upended working patterns, but return-to-office mandates have started to improve the picture, with investors warming to buildings seen as trophy assets in desirable locations. Built in 1913, the 444,000 square feet Paris block also contains 57 luxury apartments, catering and cafes. It was originally owned by French bank Societe Generale before being sold to Union in 2003. Investors have submitted bids in recent days, with some coming in under the asking price and closer to 650 million euros, the first source said. The process is still live and there can be no guarantee a deal is reached. A spokesperson for Union Investment confirmed that it had shortlisted investors and said it had excluded offers below 650 million euros. It declined to comment on individual bidders. Blackstone, Hines and Commerz Real declined to comment. Property publication Green Street News first reported that bidders had been shortlisted, and that others included AXA IM, Tishman Speyer and a joint venture between Norges Bank Investment Management (NBIM) and Generali. NBIM declined to comment, while the other investors named by GSN were not immediately available for comment. The building's offices are 98% let and home to tenants including watchmaker Swatch Group, chocolatier Lindt & Sprüngli and law firm Reed Smith. Office sales in Europe last year slumped to their lowest level since 2009 and transaction levels have remained subdued this year, according to MSCI data. ($1 = 0.8755 euros) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
34 minutes ago
- Yahoo
IT Distribution & Solutions Stocks Q1 Highlights: CDW (NASDAQ:CDW)
Looking back on it distribution & solutions stocks' Q1 earnings, we examine this quarter's best and worst performers, including CDW (NASDAQ:CDW) and its peers. IT Distribution & Solutions will be buoyed by the increasing complexity of IT ecosystems, rising cloud adoption, and demand for cybersecurity solutions. Enterprises are less likely than ever to embark on these complicated journeys solo, and companies in the sector boast expertise and scale in these areas. However, cloud migration also means less need for hardware, which could dent demand for large portions of the product portfolio and hurt margins. Additionally, planning for potentially supply chain disruptions is ongoing, as the COVID-19 pandemic showed how damaging a pause in global trade could be in areas like semiconductor procurement. The 8 it distribution & solutions stocks we track reported a mixed Q1. As a group, revenues along with next quarter's revenue guidance were in line with analysts' consensus estimates. In light of this news, share prices of the companies have held steady as they are up 3% on average since the latest earnings results. Serving as a crucial bridge between technology manufacturers and end users since 1984, CDW (NASDAQ:CDW) is a multi-brand provider of information technology solutions that helps businesses and public sector organizations select, implement, and manage hardware, software, and IT services. CDW reported revenues of $5.20 billion, up 6.7% year on year. This print exceeded analysts' expectations by 5.3%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' EPS estimates. "The team delivered an excellent start to 2025, as they once again helped customers navigate dynamic market conditions and accomplish mission critical outcomes," said Christine A. Leahy, chair and chief executive officer, CDW. The stock is up 7.4% since reporting and currently trades at $176.12. Is now the time to buy CDW? Access our full analysis of the earnings results here, it's free. Starting as a small computer products seller in 1982 and evolving into a Fortune 1000 company, Connection (NASDAQ:CNXN) is a technology solutions provider that helps businesses and government agencies design, purchase, implement, and manage their IT infrastructure and systems. Connection reported revenues of $701 million, up 10.9% year on year, outperforming analysts' expectations by 8.5%. The business had an incredible quarter with an impressive beat of analysts' EPS estimates. Connection delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 4.6% since reporting. It currently trades at $64.88. Is now the time to buy Connection? Access our full analysis of the earnings results here, it's free. Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE:SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions. TD SYNNEX reported revenues of $14.53 billion, up 4% year on year, falling short of analysts' expectations by 1.7%. It was a softer quarter as it posted a miss of analysts' EPS estimates. As expected, the stock is down 2.4% since the results and currently trades at $122.50. Read our full analysis of TD SYNNEX's results here. With a century-long history of adapting to technological evolution, Avnet (NASDAQ:AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components. Avnet reported revenues of $5.32 billion, down 6% year on year. This number met analysts' expectations. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts' EPS estimates. The stock is down 1.2% since reporting and currently trades at $50.62. Read our full, actionable report on Avnet here, it's free. Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ:PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes. ePlus reported revenues of $498.1 million, down 10.2% year on year. This result missed analysts' expectations by 4.9%. Zooming out, it was actually a satisfactory quarter as it produced a solid beat of analysts' EPS estimates. The stock is up 7.8% since reporting and currently trades at $71. Read our full, actionable report on ePlus here, it's free. In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump's presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Sign in to access your portfolio
