 Welcome to Mind Your Business ! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong | | |  | GDP numbers come Tuesday, jobs numbers on Friday. (Brian A Jackson/Shutterstock) | | | This is going to be a busy week.
GDP numbers are out on Tuesday, jobs figures come on Friday and the U.S. central bank, the Federal Reserve, will meet on Wednesday.
GDP numbers are probably going to show a pretty mediocre amount of growth. These are just the monthly numbers for August, but we will probably get an advanced estimate for September.
So, we will have a full(ish) picture of the third quarter.
In the last batch of GDP data, Statistics Canada said it expected the August numbers would show the economy eked out a small gain.
“Advance information indicates that real GDP edged up 0.1 per cent in August,” wrote the data agency last month.
The Bank of Canada says growth has been tepid over the past year. | | |  | | | That comes in stark contrast to the red-hot growth we’ve seen in the United States.
Third-quarter GDP numbers there came in last week showing the economy has grown by a staggering 4.9 per cent. That’s the fastest pace of growth in nearly two years. It was driven largely by consumer spending.
Sal Guatieri, senior economist at the Bank of Montreal, says that burst of growth is not expected to continue.
“We expect growth to downshift sharply in Q4,” he said in a note to clients.
“But if the current heated pace doesn't break soon, the Fed's widely expected rate pause next week won't last.”
It’s a very different economic picture here in Canada, with growth trending lower for longer.
Job growth has moderated considerably. We will get the latest jobs data on Friday, but the Bank of Canada expects a slower economy should continue to drag inflation back toward that two per cent target. | | |  | | | That would see inflation back on target by 2025.
University of Calgary economist Trevor Tombe makes the point that if that’s happening, we should see evidence of it soon.
“Since inflation is a year-over-year measure, it takes time to move. If inflation ~2 per cent by end of 2024, for example, then that means month-to-month price pressures will fall to that rate in a couple months.”
We won’t get fresh CPI data until the middle of next month — so plenty of time to read the tea leaves between now and then.
What do you think is going to happen?
As always, send me a note.
My email is: peterarmstrong@cbc.ca | | |  | | GDP numbers will kick off a busy week of data on Tuesday. Economists expect Canada's economy grew by about 0.1 per cent in August. | | | | | | Jobs numbers will follow suit on Friday. Canada added 63,800 jobs in September, about three times what had been expected. | | | | | | The U.S. Federal Reserve will meet on Wednesday. It is widely expected to leave interest rates unchanged. | | | | | Three things to read, watch and listen to this week | | |  | Emily Blunt stars in the new Netflix film Pain Hustlers. (Netflix) | | | 1. A tale of greed, money and control | | | There have been some spectacular books, articles, TV shows and movies about the opioid crisis.
One of the best was a sprawling piece in the New York Times Magazine back in 2018. It focused on the pharmaceutical sales industry that was built on the back of the painkiller business.
That piece has now been turned into a movie produced by Netflix called Pain Hustlers.
Packed with stars like Emily Blunt and Chris Evans, the film is made to feel like a documentary.
"The filmmakers aimed to paint a picture of capitalistic corruption along the outskirts of the pharma industry, where beautiful sales representatives provided doctors with financial incentive, bribing them into writing as many prescriptions as they could despite the risks to their patients,” wrote Esther Zuckerman in Time magazine.
The trailer looks slick and the story is an important chapter of an ugly episode in the industrial and pharmaceutical history of the U.S.
Check out the trailer for Pain Hustlers here.
Check out the original New York Times Magazine piece here. | | | 2. Building slogans or viable housing solutions? | | | When I have questions about how government policy works, one of my first calls is to Jennifer Robson, the program director and associate professor of political management at Carleton University.
She has a way of cutting through the noise and figuring out what a given program actually does and how it works.
So my ears perked up when I heard she wrote a piece on the new Conservative Party of Canada proposal on housing.
We have looked at some interesting housing solutions in this space.
And I have quoted several pieces that have called for — even begged our political leaders to come up with — proposals to fix the housing crisis.
I have linked to several pieces criticizing Liberal inaction thus far and poking holes in the things the federal government has proposed.
The Conservative proposal is called Building Homes not Bureaucracy. Give it a read and come to your own conclusions.
Robson found it lacks enough detail to really analyze it in a meaningful way. She says it promises to use existing agreements to force municipalities to build more, but it doesn't say how those agreements would be reopened to make housing a condition of funding.
And Robson says the proposal doesn't address how complicated multi-agency agreements can be.
"Exactly how is a city official in the local transit planning office supposed to force a developer to build faster or a real estate agent to move units faster so that the city and province can finally get some of their money back for a transit project they already completed?" she asks.
In the end, Robson says the Conservative proposal falls short.
"The legislation might well be renamed the 'Building Slogans, Not Viable Housing Solutions Act,'" she wrote. "It’s a shame because what we really need are a lot more viable solutions to a real housing challenge in our decentralized federation."
Check out the Conservative Party housing policy here.
Read Robson's piece here. | | | 3. Speaker speculation | | | I'm writing this week from Washington, D.C.
I was dispatched here to help our coverage of the White House. I landed amid one of the biggest and weirdest periods of political turmoil in a while.
First, the Republicans ousted House Speaker Kevin McCarthy. But then they couldn't come up with a plan they could all get behind to replace him.
As those divisions became clear, the very real, quite pressing work that the House of Representatives was supposed to be doing was left idle.
That includes a $100-billion US aid package for Israel and Ukraine and a plan to keep the U.S. government from shutting down.
My colleague Alex Panetta wrote a wonderful piece on Mike Johnson, the man who (finally) ascended to the Speaker's office.
Writing in Bloomberg, Erik Wasson explained just how low the bar for success has been set.
"Johnson spelled out a plan in a letter to his colleagues on Monday that lacked key details on government funding levels and U.S. support for Ukraine and Israel. But it didn’t draw immediate blowback from Republicans who have tried to leverage the threat of a federal funding lapse to make deep cuts and enact conservative policy priorities," he wrote.
As Reuters's Richard Cowan wrote, the clock is ticking.
"Congress has just over three weeks until a stop-gap measure to keep federal agencies funded runs out on Nov. 17, and Democratic President Joe Biden is also pushing for $106 billion in new spending to aid Israel and Ukraine and beef up enforcement at the U.S.-Mexico border," Cowan wrote.
A point I made on TV last week was that the partisan divides within the Republican Party are not going anywhere. They came to a head last week, but as America glides inexorably toward a presidential election year, those divisions will only get worse.
I wondered if perhaps we will look back on the chaos of the Speaker fight as merely the beginning of a new phase of Washington's rancour.
Read Alex Panetta's piece on Mike Johnson here.
Read the Bloomberg piece on the Speaker's plan to avoid a shutdown next month here.
Read the Reuters piece on the foreign aid bill here. | | | How the economy looks beyond Bay Street | | | Bitcoin's back (for now) | | | Someone sent me an email last week asking what on Earth was going on with bitcoin.
It's a good question and I figured now is as good a time as any to explain why the cryptocurrency is experiencing something of a resurgence.
Bitcoin blew up in 2020. Well, technically, it really kicked off in 2018. Then it sort of fell into a lull until the pandemic hit.
In October of 2020, bitcoin was at $11,000 US. By November of 2021, the token had reached an all-time high of $64,400.
But it promptly fell off a cliff. | | |  | But as you can see, it has bounced back. And it's showing some signs that the bounce-back may be sustained.
So, what gives? The answer is actually pretty simple.
"Bitcoin has surged nearly 15 per cent since Monday amid speculation that BlackRock’s proposed exchange-traded fund (ETF) for bitcoin could be nearing regulatory approval," wrote Julia Shapero in The Hill.
The rally kicked off when traders noticed BlackRock’s iShares Bitcoin Trust had popped up on a list controlled by the Depository Trust and Clearing Corporation (DTCC).
The DTCC said it was "standard practice" to add the ETF to the list before it received approval from the U.S. Securities and Exchange Commission. The SEC has not approved the ETF yet.
But if and when it does, it will be the first time crypto is directly tradeable on the stock market.
That is driving up prices as investors wait for final approval. But I think the more interesting question is what happens AFTER it gets listed.
What do you think?
Drop me a line at peterarmstrong@cbc.ca. | | | Share this newsletter | | or subscribe if this was
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