Latest news with #economicperformance
Globe and Mail
2 days ago
- Business
- Globe and Mail
Cracks in the economy mean rate cuts are coming
Jeremy Kronick is vice-president and director of the Centre on Financial and Monetary Policy at the C.D. Howe Institute, where Steve Ambler, a professor of economics at Université du Québec à Montréal, is the David Dodge Chair in Monetary Policy. On Wednesday, the Bank of Canada held its policy rate steady at 2.75 per cent. Although headline inflation has been at or below target for 9 of the last 11 months, there are some signs of underlying upward pressure on inflation. Also, Canada's economic performance has been more resilient than expected, so the decision made sense. However, some cracks are showing, and the next few months will be telling. We have argued in these pages on many occasions that the data the Bank of Canada receives often tell contradictory stories. The Bank must also account for the fact that its policies affect the economy only after long and variable lags. This lagged effect is important to understand, and we would make the case that while holding made sense today, more rate cuts remain the most likely outcome as we look ahead. Given the lags, the Bank should implement these cuts sooner rather than later. Bank of Canada holds key rate, says economy weathered tariffs better than expected First, let's break down the case to hold steady. The Bank's preferred measures of core inflation, which strip out the more volatile components of inflation like energy, and which supposedly capture the trend in price changes, have remained elevated, stubbornly sitting around 3 per cent since the beginning of the year. GDP growth has continued to surprise on the upside, and the word 'resilience' has been bandied about. In the first quarter of 2025, GDP growth was 2.2 per cent, significantly outpacing the Bank's 1.8 per cent forecast. Lastly, although economists expected a flat jobs report in June, the economy created more than 80,000 and the unemployment rate ticked down. However, we think there are reasons to question how truly resilient the economy is. Let's look at these in the reverse order from which we looked at the reasons to hold. While more than 80,000 jobs were created, the gains were dominated by part-time jobs, which increased by 70,000. The results of the most recent Business Outlook Survey by the Bank of Canada suggest that businesses are now placing less weight on the worst-case scenario for the tariff situation. However, uncertainty is still driving their decisions relative to hiring and investment. The majority of firms plan to keep hiring levels where they are and plan no significant investment beyond maintenance of their existing productive capacity. Weak hiring and investment will slow GDP growth. So will a fall in exports, in particular to the U.S. Exports were strong in the early months of 2025 despite the on-again, off-again tariff threats, but this appears to have been the result of Americans front-running more permanent increases in prices of goods and services bought from Canadian businesses. Exports have fallen 27 per cent since their peak in January. This will feed through to the rest of the economy, and whatever trade deal we eventually get is unlikely to be tariff-free on the remaining goods not covered by the Canada-United States-Mexico Agreement. Businesses downbeat but less worried about worst-case tariff scenario, Bank of Canada surveys find The last crack – and perhaps the most important one given the Bank's mandate – is the stubbornness of core inflation. In addition to the 3 and 3.1 per cent reading in June for the two main core measures, CPI-trim and CPI-median, year-over-year increases in more than 40 per cent of CPI components are above 3 per cent. However, as business investment weakens and consumer confidence continues to worsen (as it did in the Bank's most recent Canadian Survey of Consumer Expectations) consumer spending will slow, driving core inflation down. The core inflation measures are supposed to be good indicators of where inflation is headed over the medium term. However, they have been poor predictors over at least the past year. As inflation came down, the core measures increased, and the divergence between headline inflation (1.9 per cent in June) and the two core measures has been more than a full percentage point for three months. The decision to hold steady was understandable. Despite some signs of resilience in the Canadian economy, however, we don't believe it will last much longer. Cracks are beginning to show. Trade deal or not, more rate cuts are coming. Given the lag between changes in monetary policy and their impact on the economy, it is important for the Bank of Canada to make these cuts in timely fashion.
Yahoo
2 days ago
- Business
- Yahoo
Germany's energy consumption rises 2.3% in H1 2025
Germany experienced a notable rise in energy consumption during the first half (H1) of 2025, according to a report released by the industry statistics group AG Energiebilanzen (AGEB). In the first six months of 2025, energy usage in Europe's largest economy reached 187.3 million tonnes of coal equivalent, a 2.3% rise from 183.1 million during the same period in 2024, as detailed in AGEB's report. This rise was due to cooler weather and a slight improvement in overall economic performance. For the full year 2024, energy consumption totalled 359.6 million tonnes - a decrease of 1.1% from the previous year, according to Reuters. Natural gas usage surged 4.7%, while light heating oil demand rose almost 18%, reflecting changes in weather patterns. Despite overall stability in imported hard coal usage, there were distinct variations across different sectors. Coal consumption in power plants increased by a substantial 23% as power stations sought to compensate for reduced wind and hydroelectric generation due to unfavourable weather conditions, while photovoltaic (PV) power saw an impressive increase of 25%. In contrast, the steel industry cut back on its hard coal consumption by 12%, aligning with a reduction in pig iron production rates. AGEB also estimated that CO₂ emissions from thermal power plants rose by 2.6%. In June 2025, Germany announced a selective reduction in electricity taxes for the energy, retail and industry sectors. This decision has raised concerns among industry stakeholders. While the proposed tax cuts are intended to alleviate financial burdens, they have faced criticism for potentially distorting the market and having a limited impact. "Germany's energy consumption rises 2.3% in H1 2025" was originally created and published by Power Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Yahoo
21-07-2025
- Business
- Yahoo
J.B. Hunt Transport Services, Inc. (JBHT): Don't Sell Any Of These Companies, Warns Jim Cramer
We recently published . J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is one of the stocks Jim Cramer recently discussed. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is one of the largest trucking companies in America. As the firm's performance depends on economic performance, it's unsurprising that the shares have lost 13% year-to-date. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)'s stock is still down by 2.6% since the pre-Liberation Day tariff high. Some factors that have influenced the shares include weak earnings reports on the back of growing stocks. However, Cramer advised viewers against selling the stock: '. . .I'm very bullish on industrial. And the industrials so you don't need to fool around. . .things are better for these companies. We saw that with JB Hunt, which I didn't think had that great a quarter but it was, people regarding as an inflection quarter. So don't sell a rail, don't sell any of these capital equipment companies because I don't think people realize legislation is about capital equipment.' A truck on a highway, its exhausts billowing in the air. Previously, Cramer shared that J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) was quite popular among retail investors: 'Well what people wanted frankly, they're buying the transport, they're buying JB Hunt. They're buying the most pedestrian of things. Which I've got to tell you is really rather amazing again. It's an indicator of people are really, really bullish. They think that there's going to be return to trade. That they were too negative during this period.' While we acknowledge the potential of JBHT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. 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
Zawya
17-07-2025
- Business
- Zawya
Mauritius: African Development Bank Urges Bold Reforms to Unlock Capital and Accelerate Sustainable Growth in 2025 Report
The African Development Bank ( has urged Mauritius to accelerate structural reforms to unlock its vast capital potential and advance long-term, sustainable growth. The Bank made the call during the launch of its 2025 Country Focus Report for Mauritius, titled ' Making Mauritius' Capital Work Better for its Development.' The report notes that while Mauritius continues to post strong economic performance—recording real GDP growth of 4.9% in 2024, slightly down from 5% in 2023—structural constraints and external shocks continue to undermine the country's growth trajectory. Key growth drivers in 2024 included construction, financial services, trade, and tourism, with arrivals reaching 1.38 million, representing 97% of pre-pandemic levels. On the demand side, consumption and investment were the primary drivers of growth. Despite the persistent challenges, the report underscores Mauritius' significant untapped potential. In 2020, the island nation's total national wealth was estimated at over $96 billion—more than six times its GDP—comprising human, financial, natural, and produced capital. In addition, Mauritius' vast ocean economy resources, within its 2.3 million km² Exclusive Economic Zone, offer immense opportunities for developing a sustainable blue economy. Speaking at the launch event, Mahess Rawoteea, Deputy Financial Secretary at the Ministry of Finance, welcomed the recommendations in the report. 'We are confident that the structural reforms outlined in the 2025–2026 Budget Speech will unlock significant investments, particularly in renewable energy, and contribute to higher GDP growth,' he said. Rawoteea emphasized the central role of human capital in Mauritius' development, while acknowledging persistent challenges such as education quality, skills mismatches, low female labor participation, demographic shifts, and youth emigration. He announced the establishment of a Climate Finance Unit within the Ministry of Finance to help bridge the country's climate financing gap. 'Mauritius is undertaking institutional reforms to better mobilize domestic and foreign capital and promote sustainable development,' he added. 'We are streamlining processes, enhancing transparency, and improving the ease of doing business. Environmental protection, including addressing beach erosion, is also a key priority.' Rawoteea expressed appreciation for the African Development Bank's support, particularly in mobilizing investments in renewable energy and the ocean economy—two sectors identified as future growth pillars. In his keynote remarks, Prof. Kevin Urama, the Bank Group's Chief Economist and Vice President for Economic Governance and Knowledge Management, emphasized Africa's broader potential for transformation. 'If Africa commits to investing in its own development and managing its assets efficiently, it can reduce external dependency and harness its enormous capital for transformative growth,' he said. Urama cited weak tax administration and inefficiencies in revenue collection as major constraints to development, urging a fundamental rethink of public financial management across the continent. Wolassa Kumo, the Bank's Principal Country Economist for Mauritius presented an overview of the report. The launch event attracted senior government officials, development partners, private sector leaders, and civil society representatives. Among those in attendance were Hervé Lohoues, the Bank's Division Manager for the Country Economics Department covering Nigeria, East Africa and Southern Africa, and Nontle Kabanyane, the Bank's Principal Country Programme Officer, who moderated a panel discussion. The panel explored strategies for mobilizing domestic capital more effectively by strengthening institutions, improving regulatory frameworks, increasing transparency and accountability, and deepening regional trade integration. Panelists included: Dr. Zyaad Boodoo, Ministry of Environment, Solid Waste Management and Climate Change (natural capital), Mauritius? Mr. Sanjev Bhonoo, Principal Statistician, Statistics Mauritius (natural capital) Mr. Ricaud M. Auckbur, Chief Technical Officer, Ministry of Education and Human Resources (human capital), Mauritius? Ms. Zaahira Ebramjee, Head of National Economic Collaboration, Business Mauritius (business capital) Mr. Vikram Ramful, Head of Listing, Stock Exchange of Mauritius (financial capital) Click here ( to download the report. Distributed by APO Group on behalf of African Development Bank Group (AfDB). About the African Development Bank Group: The African Development Bank Group is Africa's leading development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). Represented in 41 African countries, with an external office in Japan, the Bank contributes to the economic development and social progress of its 54 regional member countries. For more information:
The Guardian
14-07-2025
- Business
- The Guardian
‘Neoliberalism lite' is no solution to Australia's cost-of-living and productivity crises. We must curb wealth concentration
With a national productivity roundtable on the horizon, Anthony Albanese is seeking answers to flagging economic performance, cost-of-living pressures and growing economic anxiety. But productivity debates rarely confront the elephant in the room: four decades of rising wealth concentration has coincided with Australia's worst productivity performance in living memory. The treasurer, Jim Chalmers, signalled his intent to 'grasp the nettle' on tax reform – a bold invitation to reckon with a structural driver of slowing productivity. Sign up for Guardian Australia's breaking news email The scale of the task is significant. The top 10% of households now control 44% of all wealth in Australia. The collective wealth of the richest 200 Australians has nearly tripled over two decades, mostly from property and resources – economic activities that extract value from existing assets rather than new productive capacities; what economists call 'rent-seeking'. The relationship between wealth concentration and productivity warrants examination. As economist Joseph Stiglitz argues, not all wealth represents productive capital. Rent-seeking concentrates wealth away from productivity-enhancing investments – in business innovation, public infrastructure, and worker wages. This leaves ordinary people paying ever-higher proportions of their income for necessities. French economist Thomas Piketty expanded Keynes' insight; without deliberate countermeasures, market economies naturally concentrate wealth as returns on assets outpace wages growth, making inequality an inherent feature of capitalism. This natural tendency can be accelerated by crises. The 2008 financial crisis and Covid-19 pandemic both triggered massive upward wealth transfers. While central banks' emergency measures prevented economic collapse, they disproportionately benefited those at the top. This marks a dramatic reversal from post-second world war prosperity, when countries like Australia, Canada, the UK and the US experienced broader wealth distribution. Institutional safeguards of the era, such as strong unions and progressive public policy, have steadily eroded, contributing to growing wealth concentration that now approaches pre-war levels. When middle and working-class families lose purchasing power, consumer demand falters. Since consumer spending drives 60-70% of economic activity in advanced economies, wealth concentration and income inequality trigger a demand spiral that weakens both business profitability and government revenues. Meanwhile, wealth inequality frays the social fabric. Financial hardship brings higher rates of anxiety, depression, suicide, addiction, family breakdown and domestic violence – placing further strain on public resources and healthcare systems. Despite growing awareness of wealth concentration's role in undermining economic performance and social health, political responses remain muted. Labor's re-election offers a revealing case. The party won not by proposing bold redistributive reform but by channelling voter anxiety around global uncertainty and cost-of-living pressure while keeping structural inequality off the table, as evidenced by Australian Labor's retreat on negative gearing reform. Despite commendable efforts to lift wages, wages of Australians have only returned to 2011 levels. This strategic ambiguity epitomises a modern centre-left paradox: parties can win elections on cost-of-living concerns only because they don't threaten the wealth concentration causing them. As seen in other advanced economies, failure to address underlying inequality eventually opens the door to movements that scapegoat minorities, immigrants and institutions while further slashing taxes for the rich – deepening the very discontent they exploit and threatening democracy. Chalmers has broken ranks with the usual political caution, stating that 'no sensible progress can be made on productivity, resilience or budget sustainability without proper consideration of more tax reform'. He has vowed to 'dial-up' Labor's ambition to change the tax system, signalling he is open to controversial ideas. However, newly surfaced Treasury advice suggests that while Chalmers signals political ambition, the institutional response remains conservative – tinkering at the edges while avoiding any serious confrontation with wealth concentration. Such a reset will require acknowledging a core contradiction at the heart of current policy: those who champion deregulation and resist redistribution undermine the very consumer base their prosperity depends on. The wealthy few cannot consume enough to replace the spending power of millions and the resulting demand weakness eventually undermines the economy. Unlike past technological revolutions, generative AI can perform non-routine cognitive tasks – affecting professionals across virtually every knowledge-based field . AI entrepreneur Ed Newton-Rex warned that tech elites are openly discussing their ambition to own the entire means of production through 'full automation of the economy'. As the adoption of generative AI accelerates, it threatens to decouple productivity from labour input – increasing unemployment and underemployment, pushing down wages and reducing disposable income. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion Unless proactively managed, the transition to an AI-driven economy will see instability due to large-scale job displacement and unprecedented wealth capture. The current policy mix – 'neoliberalism lite' – will not solve these challenges. Australia needs a bold vision beyond tax reform that redirects economic returns toward broad-based prosperity. Norway's Government Pension Fund Global and Alaska's Permanent Fund show how sovereign wealth funds deliver public returns that can be reinvested for collective benefit. The entrepreneurial state model also ensures public investment yields public returns. Governments already underwrite innovation but rarely retain equity. Social production wages could pay those displaced by automation for charity work, caregiving, environmental restoration, informal mentoring and civic participation. Job guarantee schemes would ensure full employment through public service roles, underwritten by the returns of sovereign wealth funds. Whatever the approach, rather than framing public investment as wasteful spending, we should recognise it as essential. Central banks may be heralding their victory over inflation but ordinary Australians have little to celebrate. Slowing inflation merely reduces the pace of price increases – it doesn't reverse the cost-of-living surge. When wealth becomes too concentrated, it erodes not only economic dynamism but also the institutional foundations of productivity. Chalmers is right to say that reform is a 'test of the country'. The upcoming roundtable should acknowledge wealth concentration as a systemic risk and confront it directly. Now is the time for cross-sector leadership. Curbing wealth concentration may no longer be just a progressive preference. It may be capitalism's only lifeline. Associate Prof Jo-An Occhipinti is an NHMRC principal research fellow and co-director of the Mental Wealth Initiative at the University of Sydney's Brain and Mind Centre Dr Ante Prodan is a computer scientist and complex systems researcher with the school of computer, data and mathematical sciences at Western Sydney University Prof John Buchanan is a labour market researcher and co-director of the Mental Wealth Initiative employed in business information systems at the University of Sydney Business School
