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Federal Reserve officials at their last meeting saw “very few signs that inflation pressures were abating” before raising their benchmark interest rate by a substantial three-quarters of a point for a fourth straight time. Rising wages, the result of a strong job market, combined with weak productivity growth, were “inconsistent” with the Fed’s ability to meet its 2 per cent target for annual inflation, the policy-makers concluded, according to the minutes of their Nov. 1-2 meeting released Wednesday. But they also agreed that smaller rate hikes “would likely soon be appropriate. The Fed is widely expected to slow its rate hikes to a half-point increase when it next meets in mid-December. At their meeting early this month, the Fed officials also expressed uncertainty about how long it might take for their rate hikes to slow the economy enough to tame inflation. Chair Jerome Powell stressed at a news conference after this month’s meeting that that the Fed isn’t even close to declaring...

People hold flags from Spain's CGT labour union as they protest outside a Zara clothing store, in Madrid, Spain, on Nov. 24. VIOLETA SANTOS MOURA/Reuters Dozens of Zara shop assistants protested in Madrid on Thursday outside the global fashion giant’s largest store to demand higher pay, and some workers in its home town in northwest Spain went on strike on the eve of its Black Friday sales campaign. Zara owner Inditex agreed last week to pay a one-off bonus of €1,000 ($1,041) to all full-time shop workers in Spain in February, according to unions that are seeking better wages for their members in the face of galloping inflation. Inditex has also offered to gradually raise monthly wages by around €200 by 2024, a proposal accepted by two of Spain’s largest union groups, UGT and Comisiones Obreras, but rejected by the protesters who are demanding at least double that. “Inditex is increasing its prices and improving its profits, while employees’ wages are lagging behind,” said Anibal...

Former Amazon.com Inc. AMZN-Q workers and labour organizers visited some of the e-commerce giant’s Quebec locations Friday as part of a global movement urging the company to stop “squeezing” workers, communities and the planet. Mostafa Henaway, a former Amazon worker and labour activist with the Immigrant Workers Center, said he and others would approach workers at the YUL2 and DXT6 facilities in Lachine to remind them of their rights and encourage their employer to do better. “We’re out here today with other Amazon associates around the world to say enough is enough,” said Henaway, who worked at the DTX4 delivery centre in Laval, Que. “At what cost is fast and free shipping?” The visit timed to Black Friday – one of the Seattle-based firm’s busiest periods – is meant to push the company to pay fair wages, taxes and better account for its affect on the environment. It’s part of the Make Amazon Pay movement, which will see Amazon workers and labour rights groups in at least 30 countri...

Empty chairs at an office in Toronto. Adetona omokanye/Tausi Insider Is remote work keeping inflation down? And if that’s the case, should we make sure it survives a downturn in the labour market? Those seem to be the questions posed by a U.S. study this year on working from home, and they seem particularly relevant when the Bank of Canada is talking about driving the unemployment rate up as a way to rein in price pressures. The study comes from the National Bureau of Economic Research (NBER). Trying to get an idea of the correlation between wages and remote work, the researchers asked businesses whether they were using more opportunities to work from home as a way to keep workers happy and moderate wage-growth pressures. Thirty-eight per cent of respondents said yes, they were indeed dangling work-at-home options as alternatives to offering more money. Looking for a more precise way to quantify the impact, the researchers used the data to calculate that expanding remote-work opportu...

Canada’s unemployment rate is still holding near historical lows even as the Bank of Canada cranks up interest rates to slow the economy and stifle inflation. Statistics Canada says employment was little changed in November, with a modest gain of 10,000 jobs. In its latest labour force survey, the federal agency says Canada’s unemployment was 5.1 per cent last month, down from 5.2 per cent in October. “The main overriding feature of today’s report was that you were continuing to gain jobs in Canada,” TD’s director of economics James Orlando said Friday. “If you add up just the number of jobs gained in November and October, it’s pretty substantial.” In October, the economy added a whopping 108,000 jobs, taking forecasters by surprise with the strong jobs gain. Employment rose in several industries in November, including finance, insurance, real estate, rental and leasing, manufacturing and in information, culture and recreation, while it fell in construction as well as wholesale and r...

If an employer is facing a “shortage” of workers, there is a simple solution: offer higher wages. Fred Lum/the Globe and Mail Don Wright is a fellow with the Public Policy Forum and a former deputy minister to the premier and head of the public service in British Columbia. He has held senior executive positions in business, government and academia. For almost 50 years Canada has done a thoroughly crappy job – to use the technical term in economics – of fostering a labour market that would provide for steady, year-over-year increases in real pay for working Canadians. I calculate that in 1976 it would have taken a worker earning the median employment income six years to save enough for a down payment on a typical single-family home. In 2020 it would have taken 17 years. If that worker lived in Greater Toronto or Vancouver, it would have taken 28 and 30 years, respectively. Given this history, one might think that governments would welcome the prospect of a change in labour market dyna...

U.S. Federal Reserve Chair Jerome Powell speaks during a news conference in Washington, on Nov. 2. ELIZABETH FRANTZ/Reuters The Federal Reserve reinforced its inflation fight Wednesday by raising its key interest rate for the seventh time this year and signalling more hikes to come. But it announced a smaller hike than it had in its past four meetings at a time when inflation is showing signs of easing. The Fed made clear Wednesday, in a statement and a news conference by Chair Jerome Powell, that it thinks sharply higher rates are still needed to fully tame the worst inflation bout to strike the economy in four decades. The central bank boosted its benchmark rate a half-point to a range of 4.25 per cent to 4.5 per cent, its highest level in 15 years. Though lower than its previous three-quarter-point hikes, the latest move will further increase the costs of many consumer and business loans and the risk of a recession. More surprisingly, the policy makers forecast that their key shor...

Inflation seems to have peaked, but the way back down for prices will take longer than the way back up. Spencer Platt/Getty Images John Rapley is a political economist at the University of Cambridge and managing director of Seaford Macro. This week’s U.S. and British inflation reports continued recent trends across Western countries, with inflation pulling back from recent highs. Next week’s Canadian figures will probably bring similar holiday cheer. Thrilled that central banks appear to be winning the war on inflation, investors have started their celebrations early, launching year-end rallies in stock markets and driving bond rates down. But while the news is unquestionably good, those celebrations may be premature. There’s a sting coming in inflation’s tail, and you can spot it in the bowels of the figures. The low prices of the past 30 years were effectively achieved on the backs of globalization and an increase of cheap labour. Now that both trends are reversing, we’ll never get...

New Canadians, including Zahra Aminmoghaddam, centre, from Iran, take the oath of citizenship during a special Canada Day ceremony in West Vancouver on July 1, 2017. DARRYL DYCK/The Canadian Press David Green is a professor in the Vancouver School of Economics at the University of British Columbia and an international fellow at the Institute for Fiscal Studies in London. “When all you have is a hammer, all the world’s a nail.” This saying isn’t usually seen as a complimentary description of any policy approach but it appears to capture Canada’s immigration policy. Immigration, undoubtedly, touches on nearly every aspect of our economy – from employment to output growth to health care to housing. And to hear the government speak, you would think it’s the right tool for the job in every one of them. The problem is, it’s at best an ineffective hammer for every one of them, and using it more will cause more problems than it will solve. The size of the hammer is big and getting bigger. At...

Alimentation Couche-Tard Inc. is one of eight Canadian companies pegged for long-term investing on the stock market, according to an RBC list. Graham Hughes/The Canadian Press Getting caught up on a week that got away? Here’s your weekly digest of Tausi Insider’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more. New year, better financial outlook? Sure, interest rates remain high, as does inflation, and we’re teetering on the edge of a recession – but here’s the good news, according to Rob Carrick. The new year is expected to bring an end to hikes in interest rates, which the Bank of Canada raised seven consecutive times in 2022. We may even see them fall in the second half of 2023. Housing prices have also been dropping as of late, and are expected to continue to plummet this year – below $1-million in Toronto and Vancouver, if you can believe it. This will make buying a home more attainable for many C...

A hiring sign at a job agency in Mount Prospect, Ill., on Jan. 3. Nam Y. Huh/The Associated Press For months, the outlook for the U.S. economy has been a mostly bleak one: Inflation hitting a four-decade high, consumer spending weakening, interest rates surging. Most economists pencilled in a recession for 2023. An economic downturn is still possible. Yet in recent weeks, with inflation showing widespread signs of easing, a more cheerful view has gained traction: Maybe a recession isn’t inevitable after all. One reason for the tentative optimism is evidence that an acceleration in U.S. wages, which has benefited workers but also heightened inflation, is slowing. Federal Reserve Chair Jerome Powell has frequently pointed to fast-rising worker pay to explain why the Fed has had to raise interest rates so aggressively. Fed rate hikes, if carried out far enough and long enough, can weaken the economy so much as to trigger a recession. On Thursday, the government is expected to issue anot...

Inflation seems to have peaked, but the way back down for prices will take longer than the way back up. Spencer Platt/Getty Images John Rapley is a political economist at the University of Cambridge and managing director of Seaford Macro. This week’s U.S. and British inflation reports continued recent trends across Western countries, with inflation pulling back from recent highs. Next week’s Canadian figures will probably bring similar holiday cheer. Thrilled that central banks appear to be winning the war on inflation, investors have started their celebrations early, launching year-end rallies in stock markets and driving bond rates down. But while the news is unquestionably good, those celebrations may be premature. There’s a sting coming in inflation’s tail, and you can spot it in the bowels of the figures. The low prices of the past 30 years were effectively achieved on the backs of globalization and an increase of cheap labour. Now that both trends are reversing, we’ll never get...